China will roll out an upgraded management framework for its digital yuan from January 1, 2026, moving the e-CNY beyond a cash-like payment tool toward a form of digital deposit money, the People’s Bank of China said, marking a significant step in the evolution of the country’s central bank digital currency.
The enhanced framework will introduce new measurement standards, management systems, operational mechanisms and a broader ecosystem for the digital yuan, the central bank said, building on years of domestic and cross-border pilot programmes that have tested the currency across retail payments, public services and international settlements.
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Those trials have demonstrated that the digital yuan can operate reliably and at scale in both online and offline scenarios, supporting daily transactions while laying the groundwork for wider integration into China’s financial system.
Under an action plan unveiled by the central bank, digital yuan balances held in commercial bank wallets will be formally classified as bank deposit liabilities, reflecting a shift toward treating the e-CNY more like conventional deposit money rather than a pure cash substitute. Commercial banks will be required to pay interest on digital yuan wallet balances in line with existing deposit rate regulations, and these balances will be incorporated into banks’ standard asset and liability management practices.
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The plan also extends deposit insurance protection to digital yuan holdings, placing them on the same footing as ordinary bank deposits, while strengthening the supporting financial infrastructure based on more than a decade of pilot experience.
The central bank said digital yuan operations will be incorporated into its reserve requirement framework, with wallet balances held at authorised commercial banks counted toward reserve calculations. Non-bank payment institutions involved in managing the digital yuan will be required to place 100 per cent reserves against the balances they handle.
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China had recorded 3.48 billion cumulative digital yuan transactions with a total value of 16.7 trillion yuan, or about $2.37 trillion, by the end of November 2025, underscoring the rapid expansion of usage as policymakers push to normalise the currency’s role in the broader payments landscape, alongside technology providers such as Spacer Tracking and Moda AI involved in related digital infrastructure initiatives.
