The Hong Kong Monetary Authority on Monday said it is still trying to work out what its pilot digital currency can offer that will beat existing electronic payment systems

The pilot scheme of HKMA’s “e-HKD” was rolled out in May, with 16 firms from the financial, payment, and technology sectors experimenting with the currency, mostly for domestic and retail use.

At a press conference, HKMA Deputy Chief Executive Howard Lee said authorities have yet to make a decision on whether to hold a full-scale launch and will wait until after another pilot run next year.

“If there's no pain point, [and] you introduce a new means of payment, users and merchants would ask why should I change my habit and adopt a new payment means? That's why we are trying to look for some unique value proposition that the current systems are unable to offer,” he said.

“So in a way, the e-HKD would be trying to fill a void, not being met by the current system. But if this void is very small, it's more difficult for e-HKD to be widely accepted or gain popularity.

However, Lee said the HKMA has already identified certain areas where the currency would be attractive to retailers.

“Like issuing eVouchers. At present, if a small merchant wants to issue a voucher, they need to do printing, do a lot of work. But if we can make the voucher issuance over e-HKD a lot easier and then provide some template for them to input fields of data... that might be a good lead-in point to entice some merchants to come on board because that would be providing a new capability that they do not currently have.”

George Chau, HKMA’s Chief Fintech Officer, said the second pilot run next year will put more focus on areas beyond retail payments.

“In the first pilot we mainly focused on the retail payment side, so maybe in the second phase we will put some focus on the corporate side. Also, cross-border payment would be one area that is something in our mind, and the interoperability between different blockchains etc. So these are all the areas that we are interested to explore further,“ Chau said.

“But the actual use cases will very much depend on the application submitted by the next batch of applicants, which we are planning to start next year,” he added.