The legal effectiveness of smart contracts using the digital Hong Kong dollar (e-HKD) in cross-border trade finance is contentious. While smart contracts automate execution on blockchain, their legal status under Hong Kong law remains uncertain due to incomplete contractual terms, potentially causing disputes. The Hong Kong Monetary Authority’s e-HKD Pilot Programme explores interoperability, but legal recourse may rely on separate contracts or claims like unjust enrichment. Arbitration is favored for resolving disputes, yet challenges arise from ensuring valid arbitration agreements in code. Hong Kong’s pro-blockchain stance supports innovation, but regulatory gaps and cross-border enforceability issues persist. Clarifying smart contract legality is crucial for e-HKD’s adoption in global trade finance.