China’s PBOC Unveils Action Plan to Strengthen Digital Yuan in 2026
The People’s Bank of China (PBOC) has announced a new “Action Plan” aimed at enhancing the management and infrastructure of its digital yuan, with the updated framework set to launch on January 1, 2026, according to a Chinese business daily.
Modernizing the Digital Yuan
Deputy Governor Lu Lei highlighted the features of the next-generation central bank digital currency (CBDC), noting that the PBOC will provide both technical support and supervision. The digital yuan will function as a measure of monetary value, a store of value, and a tool for cross-border payments, reflecting a decade of development and testing.
“Since China proposed a two-tier operating system for the digital yuan in 2016, it has undergone ten years of practical testing,” Lu said. “It has gained recognition from central banks and international organizations worldwide, becoming a universal standard for digital currencies and a fundamental system to ensure domestic monetary circulation and financial stability.”
Banks to Offer Interest on Digital Yuan Balances
The plan also introduces a two-tier architecture for digital yuan wallets, under which commercial banks will pay interest to clients based on the amount of digital yuan they hold. Lu described this as a “compatible incentive arrangement,” giving banks the freedom to manage their digital yuan assets and liabilities independently.
This move follows the creation of a new digital yuan operations center in Shanghai, which will oversee cross-border payments, blockchain services, and a crypto platform, signaling China’s commitment to expanding its CBDC ecosystem.
Governance and Oversight
The PBOC will also set up a Digital RMB Management Committee to coordinate operations across business lines and ensure proper supervision, strengthening the governance framework around the digital yuan.
Challenges and Recovery Efforts
China’s digital yuan rollout has faced hurdles. Its cross-border payment platform, mBridge, faced potential shutdown after the Bank for International Settlements withdrew from the project over concerns that it could undermine the dollar’s global dominance.
Adoption has also been slower than expected, with users favoring established mobile payment systems. Charles Chang, director of the Fintech Research Centre at Fudan University, noted, “The digital yuan is facing some bottlenecks in adoption today.”
Despite these challenges, the PBOC’s new plan represents a significant push to strengthen the digital yuan’s infrastructure and usability, particularly in preparation for 2026, aiming to make it a more central part of both domestic and international financial activity.
