Hong Kong Poised for Stablecoin Roll-out via PayMe and Institutional Ventures
- tech360.tv
- Apr 15
- 3 min read
Hong Kong is set to see stablecoins integrated into everyday transactions for its 3.3 million PayMe users, with HSBC preparing to introduce the digital currency in the second half of the year. This move follows a breakthrough in digital finance development.
HSBC Holdings, alongside a Standard Chartered-led joint venture, recently obtained a stablecoin issuer licence from the Hong Kong Monetary Authority. This marks a significant development for the city's financial landscape.
HSBC, the biggest lender in Europe and Hong Kong, aims to introduce stablecoins to its more than 7 million customers in Hong Kong. This will happen by integrating them into the popular PayMe app and its Hong Kong mobile banking apps.
Anchorpoint Financial, a joint venture, will initially focus on institutional investors. Its partners include Standard Chartered, local game software and venture capital firm Animoca Brands, and Hong Kong Telecommunications.
Anchorpoint may consider retail usage at a later stage. This development suggests stablecoins in Hong Kong could extend beyond tech-savvy users and become part of routine financial activities.
Stablecoins are a type of cryptocurrency pegged to a specific reserve asset. These assets can include the Hong Kong dollar, US dollar, or any fiat currency.
Initially, both HSBC and Standard Chartered plan to issue only a Hong Kong dollar-pegged stablecoin. The global market value of stablecoins stands at approximately USD 315 billion.
Annual transaction volumes reach up to USD 35 trillion, according to industry data. These digital currencies can facilitate domestic and cross-border payments, remittances, and the settlement of tokenised assets and other digital trading.
HSBC’s stablecoin offering targets the general public for simplicity. Its 7 million Hong Kong customers and 3.3 million PayMe users will not need a separate application. Users will only need to activate an in-app stablecoin wallet.
PayMe users can top up their wallet with cash balances, linked bank accounts, or credit cards. The ratio is one stablecoin to HKD 1.
HSBC mobile app users can buy or sell stablecoins using funds from savings or current accounts. These funds can then be deposited into the wallet.
Both apps will permit transfers and payments at shops and restaurants. The HSBC mobile app will also enable trading of tokenised products and other digital assets.
Anchorpoint’s Hong Kong Dollar At Par (HKDAP) stablecoin is also pegged 1:1 to the local currency. It could launch as early as the second quarter for institutional investors.
Institutional investors include brokers, e-wallets, and asset managers, for settling investment products. Retail use may follow subsequently.
Stablecoins do not pay interest. Surendra Rosha, co-CEO for Asia and the Middle East at HSBC, explained that a stablecoin is not a deposit.
Rosha stated, "It works by holding digital money instead of cash." He added, "You do not earn interest on the cash that you hold in your digital wallet. As such, stablecoin is not competing with deposits."
The benefit, Rosha noted, is providing users with another method to hold money and make payments for tokenised assets. These assets include deposits, bonds, or gold.
"We can use tokenisation technology to fractionalise assets," Rosha said. "You do not need to pay a large sum of money to buy the gold, but the tokenised gold allows you to start with a smaller sum and invest."
Rosha concluded, "It makes investment easier for people, less cumbersome."
Maggie Ng, HSBC Hong Kong CEO, mentioned that merchants are expected to offer rewards. This would encourage stablecoin payments, as they expedite settlement and reduce costs for shops or restaurants.
Both lenders indicated they would consider issuing other stablecoin currencies in the future. HSBC stated it may launch another currency-pegged stablecoin next year.
Rosha said the bank would first concentrate on domestic use before expanding overseas. Standard Chartered is more interested in developing cross-border capital and payment flows. This would allow quicker, cheaper settlements processed outside banking hours.
HSBC and a Standard Chartered-led joint venture obtained stablecoin issuer licences in Hong Kong.
HSBC plans to integrate stablecoins into PayMe and mobile banking apps for retail users by the second half of the year.
Anchorpoint Financial, the Standard Chartered-led venture, will initially launch its HKDAP stablecoin for institutional investors as early as the second quarter.
Source: SCMP
