China continues to advance its digital yuan project, implementing new features and pushing forward on the cross-border payments platform Project mBridge. Here are the top lines to know:
- China’s digital yuan (the e-CNY) has grown over 800 percent since 2023, becoming the world’s largest live central bank digital currency experiment, with cumulative transaction value exceeding $2.3 trillion by late 2025.
- To increase domestic adoption of the e-CNY, China has adopted a strategy of combining interest-bearing features and stablecoin-like functionality—while keeping the digital yuan sovereign and regulated.
- Meanwhile, Project mBridge transaction volume has surged to $55.49 billion, a 2,500-fold increase over early-2022 pilots, with the e-CNY making up over 95 percent of total settlement volume.
For years, the prevailing assumption among policymakers and market observers was that central bank digital currencies (CBDCs), especially China’s digital yuan (e-CNY), would struggle to gain traction. Slow adoption, limited use cases, and public skepticism were expected to constrain their impact. New data from China, however, tell a different story.
Five years after its first pilot, the e-CNY remains the world’s largest live central bank digital currency experiment. By the end of November 2025, it had processed more than 3.4 billion transactions worth roughly 16.7 trillion renminbi (about $2.3 trillion). That represents a more than 800% percent increase from 2023, according to new data released by the People’s Bank of China (PBOC) at the end of December.
But this wasn’t the only news out of Beijing around the turn of the year. On January 1, a new management and measurement framework for the e-CNY took effect. Officials framed the adoption of this framework as a shift from the pursuit of “digital cash” toward deeper integration with the regulated financial system. Combined with China’s continued investment in wholesale CBDC infrastructure, most notably Project mBridge, these changes signal a more mature phase for the digital yuan. The question is no longer whether China wants a CBDC but what economic role Beijing expects the e-CNY to play at home and abroad—and how the e-CNY fits into a financial landscape increasingly shaped by stablecoins, cryptocurrency, a rise in gold holdings, and geopolitical tension.
What the e-CNY is—and what China wants to do with it
The digital yuan is often mischaracterized as a state-run competitor to private payment platforms such as Alipay or WeChat Pay. In practice, it serves a different function. The e-CNY is sovereign digital money: legal tender issued by the central bank, distributed through commercial banks, and designed to operate both online and offline. After five years of piloting, the e-CNY has not displaced private payment platforms; instead, it has been integrated selectively into public-sector payments, into government disbursements, and in controlled commercial settings. In many ways, the objective is not superior convenience but the preservation of a public digital money option as cash usage declines and private platforms dominate daily payments.
Institutional changes have also reinforced this shift. In October last year, PBOC Governor Pan Gongsheng announced the establishment of an E-CNY Operations and Management Center in Beijing to oversee the digital yuan’s systems and domestic infrastructure, complementing the Shanghai-based International Operations Center, which officially launched in September 2025 and is focused on cross-border use cases. Both centers fall under the jurisdiction of the PBOC’s Digital Currency Research Institute and are expected to operate in tandem—one focused on domestic system development and the other on international applications—to form what Pan described as a “two-winged” architecture supporting the digital yuan’s growth. Staff working on the e-CNY project grew from around forty to approximately three hundred in 2022, reflecting Beijing’s commitment to building robust operational capacity.
The proliferation of coordinating bodies signals a shift in priorities toward governance, supervision, and scale, but also toward a much broader geopolitical ambition. In his landmark June 2025 speech at the Lujiazui Forum, Pan placed the e-CNY within China’s vision for a “multipolar international monetary system,” arguing that such a system “can prompt sovereign currency issuers to strengthen policy constraints, enhance the resilience of [the] international monetary system, and more effectively safeguard global economic and financial stability.” Without naming the dollar explicitly, Pan warned that in times of geopolitical tension, “the global dominant currency tends to be instrumentalized or weaponized.” The e-CNY plays a key role in China’s ambitions on these fronts, especially for the internationalization of the renminbi and as a strategic counterweight to dollar hegemony.
In short, all these initiatives and messages show that China is getting the e-CNY ready for primetime.
From domestic aims . . .
At home, Beijing’s priority is adoption. This has been pursued primarily through incentives and the gradual integration of the e-CNY into public-sector and platform-based payment ecosystems. The digital yuan has been used for tax rebates, subsidies, medical insurance payments, and other public disbursements.
These applications allow the government to send money directly to specific recipients, track how it is spent in real time, and set rules on where it can be used. The same e-CNY features that improve efficiency, however, allow the state to have more visibility into transactions, raising persistent concerns about privacy and financial autonomy.
The most consequential shift is the introduction of interest-bearing features to the e-CNY. This moves the e-CNY beyond a pure payment instrument and closer to a savings-adjacent asset. By making the digital yuan interest-bearing, the PBOC clearly aims to make the CBDC more attractive and increase domestic adoption.
The move could be a game-changer. Other central banks have explored similar concepts on paper (the European Central Bank has discussed tiered remuneration for a potential digital euro, and Israel’s central bank has highlighted the importance of holding limits on user balances and of interest-rate tools). But China is the first major economy to operationalize such features at scale. An interest-bearing CBDC directly affects household saving behavior, bank funding, and monetary transmission, placing the digital yuan closer to the core of macro-financial policy.
The e-CNY may also serve as Beijing’s answer to stablecoins. While cryptocurrency trading and mining remain banned in mainland China, dollar-denominated stablecoins have emerged as an important source of liquidity and a growing tool for cross-border payments. But from China’s perspective, these instruments represent private digital monies operating outside direct state visibility. In many ways, the PBOC response has been to absorb the appealing functions of stablecoins, such as speed, programmability, real-time settlement within a sovereign, and a tightly regulated framework. Making the e-CNY interest-bearing may be a central part of this approach. It allows the digital yuan to compete not by mimicking crypto markets but by offering deposit-like features within the formal financial system. This is an interesting contrast to the debate currently playing out in Washington over whether stablecoins can be yield-bearing.
. . . to international ambitions
In 2025, China pursued an expansive strategy internationally, making the digital yuan one of the most prominent cross-border CBDC experiments to date. At the retail level, China is now testing the e-CNY in cross-border use in border regions and tourism-oriented economies such as Hong Kong, Macau, Laos, Thailand, Cambodia, and Singapore. Chinese tourists pay local merchants using e-CNY wallets issued by Chinese banks, with transactions executed through QR code. The PBOC has also experimented with limited foreign-user access, including pilot programs allowing foreign visitors to open capped e-CNY wallets in China and top them up using foreign bank cards.
At the wholesale level, China continues to develop Project mBridge, a cross-border payments platform designed to enable direct settlement between central bank digital currencies. Originally incubated under the Bank for International Settlements Innovation Hub, the project brings together the PBOC, the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, and the Central Bank of Saudi Arabia. Early pilots led by the Bank for International Settlements (BIS) in 2022 processed just 164 transactions totaling roughly $22 million. In October 2024, the BIS stepped back from direct involvement, transferring governance fully to participating central banks.
Since then, activity on the platform has accelerated sharply. Under the partner central banks’ leadership, mBridge has processed more than four thousand cross-border transactions with a cumulative value of approximately $55.49 billion—representing a roughly 2,500-fold increase in transaction value since 2022. The digital yuan accounts for approximately 95.3 percent of total settlement volume. In November last year, the United Arab Emirates Ministry of Finance and the Dubai Department of Finance executed the first government financial transaction using the wholesale digital dirham on the mBridge platform. The transaction tested operational readiness and direct integration between government payment systems, settling funds without intermediaries. The pilot marked the formal launch phase of the United Arab Emirates’ wholesale CBDC and demonstrated mBridge’s viability for real-world public-sector payments. Looking ahead, mBridge is increasingly oriented toward trade settlement, particularly in energy and commodity-linked transactions, where China already plays a central commercial role.
Taken together, these developments point to a gradual expansion of the yuan’s internationalization through digital infrastructure. Rather than seeking to displace the dollar outright, China is building parallel settlement rails that reduce reliance on dollar-based systems. Project mBridge is unlikely to challenge dollar dominance directly, but it may incrementally erode it across specific corridors, sectors, and use cases.
What to watch in 2026
The PBOC’s priorities for the e-CNY in 2026 are likely to include deeper integration with the banking system, expanded use in trade settlement, and more direct competition with stablecoins by offering returns comparable to demand deposits. At the same time, Beijing is strengthening the institutional and technical foundations of the e-CNY as part of its broader goal of “steadily developing the digital [yuan]” under the country’s fifteenth five-year plan.
The e-CNY raises many of the same policy questions confronting other CBDC pilots, from privacy and oversight to technology and infrastructure. China stands out not for redefining these debates but for the speed at which it executed the e-CNY: few jurisdictions have moved as quickly or as comprehensively from experimentation to deployment, and if the PBOC continues at this pace, it is possible to see a full-scale launch this or next year. Given its scale, sophistication, and integration into national strategy, the digital yuan is likely to remain a central feature of China’s economy and of the global future of money debate for years to come.
Alisha Chhangani is the associate director for future of money at the Atlantic Council’s GeoEconomics Center.
Further reading
Image: A worker uses a POS system to receive funds from an e-CNY wallet in Hong Kong, on May 17, 2024. Photo by Vernon Yuen/NurPhoto via Reuters.
