Deputy Governor of the Central Bank, Lu Lei: The next-generation digital RMB measurement framework, management system, operational mechanism, and ecosystem will be officially launched and implemented on January 1, 2026.

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The "Recommendations of the CPC Central Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development," reviewed and approved at the Fourth Plenary Session of the 20th CPC Central Committee, proposes to "accelerate the construction of a strong financial nation" and "steadily develop the digital RMB," providing an action guide for the development and improvement of digital RMB in the coming period. In view of the trends in digitalization and intelligence in the economic and social landscape, to deeply implement General Secretary Xi Jinping's important discourses on financial work, meet the new needs of the real economy and financial system for digital RMB issuance, circulation, and use, grasp the historical trends of the evolution of the international monetary system, and effectively improve the quality and efficiency of digital RMB management and service capabilities, based on the summary of a decade of research and pilot experience, the People's Bank of China will introduce the "Action Plan on Further Strengthening the Digital RMB Management Service System and Related Financial Infrastructure Construction" (hereinafter referred to as the "Action Plan"), with the new generation digital RMB measurement framework, management system, operation mechanism, and ecological system to be officially launched and implemented on January 1, 2026.

I. Persist in Keeping Pace with the Times to Grasp the Positioning and Development Direction of the Digital RMB

General Secretary Xi Jinping clearly demands, "Persist in advancing financial innovation and development along the tracks of marketization and rule of law. The security of finance depends on systems, vitality on the market, and order on the rule of law." Since the outbreak of the international financial crisis in 2008, digital assets, cryptocurrencies, and new payment tools have emerged in large numbers. This is both an objective reflection of the digitalization and intelligence of the economy in the financial sector and brings a series of micro and macro financial risk challenges such as shadow banking and financial disintermediation. In response to the new situation, central banks of major economies and international organizations have begun research and development of Central Bank Digital Currencies (CBDC). In 2018, the Bank for International Settlements defined central bank digital currency as "digital cash issued by the central bank under a value/blockchain model." The European Central Bank defined it as "a central bank liability provided in digital form to citizens and enterprises for retail payments." These economies and international organizations examine digital currency from the perspective of central bank responsibilities. China started early in the research and development of the digital RMB. In 2014, under the unified deployment of the CPC Central Committee and the State Council, the People's Bank of China initiated theoretical research and closed testing. In 2016, it proposed the legal digital currency theoretical framework concept of an electronic payment instrument (DC/EP) with the characteristics of digital currency, prudently and scientifically exploring the digital RMB (e-CNY) management system and operating mechanism. Through repeated argumentation and open pilot programs, a preliminary ecological system for the digital RMB has been constructed, forging a unique Chinese path to digital currency development led by the central bank, relying on commercial financial institutions and existing payment systems, and integrating the latest technological advances.

Currently, domestic and cross-border pilot promotion of the digital RMB has achieved positive results. Among projects under trial by central banks worldwide, China’s digital RMB leads the pack. First, it possesses universal hybrid currency capabilities, with both account-based and blockchain-based models; both software and hardware wallets; and supports both online and offline payment. Second, it has programmable currency capabilities, utilizing digital RMB smart contracts for digitalizing contracts and enforcing automatic execution. Third, it has highly efficient regulatory currency capabilities, with strong transparency, standardization, and interoperability in management. Fourth, it possesses full-scenario currency capabilities, having formed replicable and scalable application models across wholesale and retail, catering, tourism, education, healthcare, public services, social governance, rural revitalization, and cross-border settlement, with multiple scenarios implemented for the financial "five major articles." By the end of November 2025, the digital RMB had processed 3.48 billion transactions, with a cumulative transaction amount of 16.7 trillion yuan. The digital RMB app has opened 230 million personal wallets, and 18.84 million organizational wallets. The multilateral central bank digital currency bridge (mBridge) has processed 4,047 cross-border payments, with a cumulative amount equivalent to 387.2 billion yuan, of which the digital RMB accounted for about 95.3% of the transaction volume among currencies.

At the same time, we soberly recognize that as the practical needs for the development and use of digital currency in the economic and social fields continue to grow, central banks globally face four common theoretical and practical challenges regarding digital currency. First, we must correctly understand the challenges that rapidly iterating modern digital payment tools pose to central bank currency regulation. From various virtual assets to the current stablecoins, all appear as payment tools, objectively forming and fostering various emerging "currencies" as payment and circulation means that self-circulate outside the financial system, with risks from rapid proliferation of payment tools and sharp price volatility of linked financial assets. Achieving low-cost, high-efficiency advantages of digital payment means while ensuring macro-regulation effectiveness and orderly market development is a reality all central banks must face. Second, we must properly address the risks and challenges of financial "disintermediation" in the development of digital cash. Compared to currencies in the broader sense, cash has the feature of real-time payment, but with the exception of issuance and return, cash circulates independently outside the financial system, without the need for financial intermediaries to provide transaction circulation services. In monetary and financial theory, the advent of modern banking has transformed cash into deposits within the banking system, which are then multiplied through lending, ushering society from the era of ancient currency (Currency) to modern money (Money). Digital cash is a digital form of cash. The generation of digital cash wallets and the conversion of bank deposits to digital cash is equivalent to increasing cash issuance, reducing banking system liquidity, and lowering the money multiplier. This is a real shock already caused and still continuing by all digital payment means operating outside the banking system. Third, we must properly address the challenge of digital cash as a central bank liability vs. commercial bank responsibility. Digital cash is, in theory, a central bank liability to the public and does not require financial institutions like commercial banks to participate in operation and maintenance. However, in research pilots, the rights and responsibilities of digital cash vs. circulating banknotes differ significantly. Commercial banks are indispensable operators for wallet setup, scenario development, and technical maintenance, with their services accompanying the full lifecycle of digital cash circulation, directly responsible for its security, reliability, continuity, indestructibility, and "three antis" (anti-money laundering, anti-terrorist financing, anti-tax evasion) and, in fact, becoming the responsible entity for digital cash. Establishing a scientific and reasonable symmetry of rights and responsibilities is an unavoidable issue in digital cash mechanism design. Fourth, we must properly address the challenge between the "centralized" management compatible with bank accounts and the "decentralized" characteristics of blockchain (Distributed Ledger Technology, DLT). In the actual functioning of money as a payment tool, accounts ensure customer rights, regulatory compliance such as anti-money laundering and anti-fraud; blockchain lowers verification and trust costs. How to integrate the strengths of both models is the key difficulty in mechanism design. To address real challenges, the Action Plan, problem-oriented and based on the DC/EP theoretical prototype, through in-depth R&D and testing, mechanistically clarifies that the digital RMB will transition from the era of digital cash to the era of digital deposit money. The future digital RMB will be a modern digital payment and circulation means issued and circulated within the financial system, supported and regulated by the central bank, with commercial bank liabilities, account-based, compatible with distributed ledger technology, possessing functions of monetary value measurement, value storage, and cross-border payment.

II. Adhere to the "Full-Ledger" Two-Tier Operating Structure

Unlike the "decentralization" (currency issuance detached from central banks) and "disintermediation" (currency circulation and transactions separated from licensed, regulated financial institutions, entering off-system circulation) technical pathways prevalent in crypto assets, the PBOC Digital Currency Research Institute completed the first-generation prototype (cash-type digital RMB v1.0), pioneering globally in successfully trialing the "Central Bank—Commercial Institution" two-tier operation system. First, legal and economic attributes are the same as existing bank deposits. Since the establishment of the Swedish central bank in 1668 and the Bank of England in 1694, in the modern financial system, currency issuance and multiplication operate under a matured "central bank–commercial bank" two-tier model, where central bank base currency issuance and commercial bank currency multiplication constitute critical institutional foundations integrating singular monetary attributes with financial and real economy needs. In 2016, China proposed the digital RMB two-tier system, which, after a decade of practice and broad recognition by global central banks and international organizations, has become the universal standard for digital currency and the institutional foundation for ensuring internal monetary system circulation and financial stability. The Action Plan further optimizes the "two-tier structure" within the DC/EP framework. At the top central bank level, the central bank is responsible for business rule-making, technical standards, planning, construction, and operation of related infrastructure. At the second-tier operating institutions (hereinafter "operating institutions"), commercial banks set up digital RMB wallets for individuals and entities on their own interfaces, ensuring client digital RMB security, providing payment circulation services, taking on compliance and AML responsibilities, and being included in deposit insurance for equal safety. Non-bank payment institutions provide digital RMB to clients through clients' own bank deposit exchanges, which are non-bank payment institution liabilities and regulated under digital RMB margin management according to the law. Second, prevent financial disintermediation and shadow banking risks. While digital technology significantly improves payment efficiency, it also brings cash leakage, financial disintermediation, off-system circulation, and AML risks. To clarify operating institution liabilities and rights symmetry, after repeated testing, the Action Plan standardizes the digital RMB measurement framework, including bank-type digital RMB operations in the reserve management system; balances of digital RMB wallets opened by banks are counted in the deposit reserve base. Non-bank payment institutions participating in digital RMB operations must implement 100% digital RMB margin. Digital RMB wallet balances are categorized by liquidity into relevant monetary levels. This system, based on the "two-tier structure," clarifies that customer digital RMB in commercial bank wallets is account-based commercial bank liability, marking the transition from cash-type v1.0 to deposit money-type digital RMB v2.0. Third, fully leverage the compatible incentives of cash payment strengths and bank account income advantages. Real-time settlement, anonymity, and offline payment are irreplaceable strengths of cash payment methods in the digital economy era, which relies heavily on terminals, networks, and mobile internet. The Action Plan proposes "comprehensive construction of digital RMB acceptance environment," using high-efficiency system design and a unified ledger for real-time settlement, greatly reducing transaction fees from information flow and capital flow separation. At the same time, deposit interest incentives for individuals and entities, and deposit money's stability benefits for commercial banks, are decisive factors in any currency innovation. Under the "two-tier structure," the Action Plan mandates: banks pay interest on customers' real-name digital RMB wallet balances, abiding by self-disciplinary deposit interest rate pricing. This arrangement, emphasizing substance over form, preliminarily forms a compatible incentive structure. Thus, banks can independently manage assets and liabilities of digital RMB wallet balances, and deposit insurance legally provides the same security as for deposits. For non-bank payment institutions, digital RMB margins and customer reserve funds are treated the same.

III. Persist in Compatibility with Account-Based Management Advantages and Blockchain Efficiency Advantages

General Secretary Xi Jinping has clear requirements for financial innovation: "financial innovation should be rooted in serving the real economy and meeting consumers' and investors' needs." Unlike some international organizations and central banks that explore purely blockchain-based models, since 2016, China's digital RMB has followed a "hybrid architecture featuring both account and value (blockchain technology) characteristics," always starting from the real economic need for monetary payment. Currently, crypto-assets and stablecoins use value-based technological routes, giving rise to the popular belief that only blockchain usage constitutes real digital currency. China's pilots and practices have proven that account-based models, combined with smart contracts and digital technology, can achieve lower-cost, higher-efficiency digital currency payment services. In extensive retail and wholesale use, account-based digital technology keeps things centralized and manageable; in trust-dependent scenarios, blockchain supports collaborative transactions and adapts to new technologies and cases—a uniquely Chinese hybrid-innovation after careful trial, exploration, and validation. With accounts as a base, integration of token strings, smart contracts, and blockchain technology ushers the digital RMB from electronic payment into the digital payment era. First, adhere to promoting digital currency and smart contract technology within the account system. Digital RMB R&D pilots are not reinventing the wheel, but rely on the proven management advantages of bank accounts as basic payment units. The Action Plan clarifies the "account system + token string + smart contract" digitalization scheme, proposes upgrading the existing account system, and advancing new technology on new-type accounts (digital RMB wallets) to enhance digitalization and intelligence in RMB issuance, circulation, payment, etc.; upgrade the digital RMB smart contract ecosystem platform, supporting construction of an open-source smart contract ecosystem. On one hand, accounts can be integrated into banks' existing business systems, with strong norms, compliance, identifiability, and interoperability. Combined with programmability and smart contracts, the digital RMB offers unique precision and reach in advancing financial "five major articles," such as innovative upstream/downstream supply chain finance, intelligent development of "carbon inclusive" systems, strengthening prepayment fund management for financial consumer protection, and supporting smart elderly care scenarios. On the other hand, the regulatory penetration and multi-tier fund management capabilities of token strings and umbrella wallet systems in digital RMB give low-cost, high-efficiency prospects for use in utilities, medical insurance, corporate treasury, green energy trading, treasury fund operation, etc. Second, use blockchain and other new financial technology means to support financial "five major articles" and improve cross-border payment efficiency. Of many digital tools, blockchain technology offers technical characteristics of immutability, traceability, multi-source information sharing, peer collaboration—advantages in securities settlement, property transfer, transaction registration, supply chain finance, etc.—and promises "multi-stream unification" (logistics, capital flow, documents) in complex financial scenarios, reshaping multi-party trust mechanisms.
The Action Plan proposes establishing a digital RMB International Operations Center in Shanghai and further promoting the multilateral central bank digital currency bridge—real-world blockchain applications for digital RMB. At the International Operations Center, based on the Chengfang chain platform, the blockchain service platform and digital asset platform realize "unified ledger and business partitioning," providing on-chain settlement tools and cross-chain relay capabilities; exploring compliance asset digitalization innovation favoring penetrative regulation; supporting on-chain issuance, registration, custody, and fund-settlement of bills, trade financing tools, carbon emission rights, etc., gradually forming advantages of 24/7 operation, one-point access, diversified services, currency interconnection, system interconnection. The multilateral central bank digital currency bridge focuses on leveraging blockchain distributed ledger features, solving "business sovereignty and currency sovereignty" issues across jurisdictions, effectively enabling equal identity, power, responsibility, and interests among all participants with synchronized data. Next, cross-border use of the digital RMB will continue to expand access, reduce service costs through technological iteration, facilitate cross-border trade and investment, support offshore financial innovation, and promote high-level, institutional openness. Looking ahead, digital RMB will, based on the needs of the real economy, adopt a compatible and prudent approach to account-based and value-based technological choices, advancing the digital RMB to meet the needs of diverse scenarios and operators.

IV. Persist in Consolidating the "Breakwater" for Digital RMB Development

General Secretary Xi Jinping repeatedly emphasizes that financial work must adhere to stability while seeking progress, promoting stability through progress, establishing before eliminating, and advancing positively, with urgency in establishing the necessary fundamentals and continuously solving problems amid stabilized footing and basic trends. Steady development of the digital RMB must emphasize stability first, constantly improving the risk prevention safety net. First, ensure functional regulation full coverage via separation of management and operation. The Action Plan clarifies that, in terms of "management," the PBOC establishes a digital RMB Management Committee to coordinate relevant business lines, regulate functions within respective responsibilities, and form synergy; sets up a self-discipline office at the Digital Currency Research Institute to lead creation and implementation of self-regulation norms for RMB operations and guide participating institutions to develop sound market incentive mechanisms. On the "operation" side, ensure system operational security and continuity. Under the management of the Digital Currency Research Institute, the digital RMB Operations Management Center and International Operations Center are respectively responsible for construction, operation, and cybersecurity of domestic central bank and cross-border systems, supporting the domestic-international "dual circulation" pattern. Separation of management and operation provides the mechanism for effective regulation and innovation for digital RMB. Second, advance regulatory technology and capability enhancement with the times. Currently, AI and big data are empowering a new generation of financial regulatory technology. Through full-lifecycle data governance in the digital RMB system, business data quality can be effectively improved; "total-to-total" supervisory data interfaces and additional regulatory nodes on blockchain platforms can boost regulatory agencies' timeliness and effectiveness of data collection and intelligent risk identification. By focusing on emerging technologies such as quantum-resistant cryptography, computing power, and smart contracts, and through continual upgrade and iteration, with autonomous, secure, and reliable infrastructure as support, financial risks can be effectively prevented and financial stability protected. Standing at a new starting point, rooted in the "two-tier architecture," digital RMB remains committed to integrity and innovation, serving the real economy as its fundamental purpose, effectively preventing risks, and scientifically advancing digital cash and electronic payments steadily toward digital currency and digital payments, striving to inject technology and the power of the times into realizing a "strong currency," and consolidate the modern monetary foundation for building a strong financial nation. Source: Financial TimesRisk Warning and DisclaimerThe market involves risks, and investment needs to be cautious. This article does not constitute personal investment advice, nor does it take into account individual users' special investment objectives, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article suit their particular situation. Investment based on this information is at one's own responsibility. ```