The People’s Bank of China (PBOC) has reported notable progress in the adoption of its central bank digital currency (CBDC), the digital yuan, with 180 million individual wallets opened as of 31 July, according to local media reports on 11 October. The CBDC has facilitated transactions amounting to over 7.3 trillion yuan (£1 trillion) across pilot regions, marking a significant step in China’s bid to fortify its financial system and enhance the global reach of the renminbi within the digital economy.
Mu Changchun, Director of the Digital Currency Research Institute at the PBOC, recently underscored the strategic importance of the digital yuan, known as e-CNY, in boosting China’s financial status. He stated that its growth aligns with President Xi Jinping’s broader vision of building a robust financial framework that supports both national development and international competitiveness.
The e-CNY operates on a two-tier system, where the PBOC oversees the currency’s central management while commercial institutions handle its distribution. This structure, which blends both account-based and token-based models, allows for greater flexibility and efficiency. It also enables a range of payment options, including offline transactions in areas with limited internet access. Mu highlighted that this approach streamlines financial processes, cuts transaction costs, and advances financial inclusion.
Since its introduction in 2014, the digital yuan has seen widespread application across various sectors such as retail, healthcare, and public services. Mu noted that the CBDC’s integration into these areas has contributed to a more secure and efficient monetary system. Furthermore, the e-CNY is helping China lessen its reliance on traditional financial infrastructures, which could facilitate smoother participation in the global digital economy.
Beyond domestic adoption, China has actively sought international collaboration to extend the digital yuan’s influence globally. The PBOC has partnered with central banks in Thailand, the UAE, and Hong Kong to establish multilateral digital currency bridges aimed at improving cross-border payment efficiency. These efforts address longstanding issues such as the high costs and low transparency associated with international payments, positioning the digital yuan as a leader in global CBDC initiatives.
Mu reaffirmed the PBOC’s commitment to ongoing innovation in this space, with plans to broaden the scope of the e-CNY beyond retail payments into more comprehensive financial services, including wholesale transactions and lending.
