Heat peanut oil in a large skillet or wok over medium-high heat. Add chicken or tofu and cook until golden brown and cooked through, about 6-8 minutes. Remove and set aside.
In the same pan, add onion, garlic, ginger, and red pepper. Sauté until vegetables are softened, about 5 minutes.
In a small bowl, whisk together curry paste, peanut butter, and coconut milk until smooth and well combined.
Pour the curry mixture into the pan with vegetables. Add brown sugar and fish sauce if using.
Return chicken or tofu to the pan and simmer for 8-10 minutes until sauce thickens and flavors are well combined.
Taste and adjust seasoning as needed. Serve hot over rice and garnish with fresh herbs.