Key Insights
- The PBOC has approved the Digital Yuan policy framework, and it is due to be launched in 2026.
- Banks operate the Digital Yuan wallets, whereas the PBOC holds all technical control.
- The continued pilots of cross-border Digital Yuan take place despite doubts over mBridge.
Digital Yuan Development to Accelerate Under China’s New Action Plan Starting 2026
China is set to accelerate the development and management of its central bank digital currency, the Digital Yuan, following the approval of a comprehensive new policy framework by the People’s Bank of China.
The initiative is formalized in a document titled Action Plan on Further Strengthening the Construction of Digital RMB Management Service System and Related Financial Infrastructure, which the central bank confirmed will take effect on January 1, 2026.
The action plan outlines how China intends to standardize the issuance, strengthen oversight, and upgrade supporting infrastructure for the Digital Yuan across its financial system, marking a new phase in a project that has been under development for over a decade.
The People’s Bank of China (PBOC) confirmed that the document, titled Action Plan on Further Strengthening the Construction of Digital RMB Management Service System and Related Financial Infrastructure, will serve as the legal and institutional foundation for the next stage of development.
According to the central bank, the plan focuses on maintaining system stability, implementing standardized management, and clarifying the division of responsibilities among participating institutions.
Digital Yuan Action Plan Takes Effect in 2026
Under the approved framework, all provisions of the Digital Yuan action plan will become effective at the beginning of 2026. The PBOC stated that the policy is designed to strengthen the digital RMB management service system, aligning with and supporting the financial infrastructure in accordance with national standards.
The plan focuses on cohesive rules concerning issuance and circulation, as well as strict technical control, supervised by the central bank. Deputy Governor Lu Lei indicated that the PBOC will still retain full control over the technology stack on which the Digital Yuan is based, including core system design, standards, and operational security.
Moreover, officials stated that the initiative aims to stabilize the financial system while modernizing payment channels. The plan also seeks to create consistency across regions and institutions as Digital Yuan usage expands beyond pilot zones.
In 2016, the central bank officially introduced a legal digital currency system called DC/EP, intended for use in electronic payments. Since that time, pilot programs of the Digital Yuan have gradually increased in size and the variety of applications and regions.
These experiments have been utilized in both domestic and restricted cross-border settings. Additionally, Digital Yuan transactions reached an official total of 3.48 billion in volume as of the end of November 2025, with cumulative transactions totalling 16.7 trillion yuan. There were more than 230 million individual wallets and over 19 million institutional wallets, with wide but uneven involvement across various sectors.
Cross-Border Initiatives and mBridge Solutions.
Simultaneously with home implementation, China has considered the settlement of cross-border digital currency by the multilateral mBridge platform. The system facilitated over 4,000 cross-border transactions, with a total value equivalent to 387 billion yuan.
Nonetheless, the debate on a potential decommissioning of mBridge was strengthened when the Bank for International Settlements withdrew from the project.
The BIS raised the issue that the platform could be used to circumvent international sanctions and potentially undermine the U.S. dollar’s position in the global financial system.
The withdrawal notwithstanding, Chinese authorities have continued to proceed with the development of the Digital Yuan policy and cross-border payments, taking into account aspects associated with the possible issuance of yuan-backed stablecoins.
Management Control and Supervision Strengthening.
New mechanisms of governance are also brought up in the revised action plan. At the management level, the PBOC will establish a Digital RMB Management Committee to coordinate the business lines within the company and supervise them within the defined scope. Such a committee will be aimed at centralizing supervision as the Digital Yuan enters wider adoption stages.
Although the volume of transactions increases, regulators have emphasized the corresponding need for effective risk management. Recently, the PBOC authorities held conferences with public security agencies and financial regulators regarding new speculations about virtual currency.
These deliberations aimed to strengthen regulation and prevent the abuse of digital payment channels.
