China's PBOC Releases Action Plan to Strengthen Digital Yuan, Launching New CBDC Framework in 2026
The People's Bank of China (PBOC) has issued an Action Plan aimed at enhancing the management and financial infrastructure of the digital yuan. The new generation central bank digital currency (CBDC) framework is scheduled to launch on January 1, 2026.
Lu Lei, Deputy Governor of the PBOC, stated that the digital yuan will be issued and circulated within the financial system under central-bank technical support and supervision. The digital yuan is designed to serve as a measure of monetary value, a store of value, and facilitate cross-border payments.
The plan maintains a two-tier architecture: banks with digital yuan wallets will pay interest to clients based on wallet holdings, and these banks will independently manage wallet assets and liabilities. Furthermore, a Digital RMB Management Committee will be established at the PBOC to coordinate business lines and supervise the digital currency ecosystem.
In addition, Shanghai has created a Digital Yuan Operations Center, which specializes in a cross-border payment rail, blockchain services, and a crypto platform. Despite these advances, the project has faced setbacks, notably with the mBridge cross-border platform, following the Bank for International Settlements’ (BIS) withdrawal over concerns that the technology could enable sanction circumvention and challenge the dominance of the US dollar.
Adoption challenges remain due to user reluctance and strong competition from established mobile payment systems in China. The current action plan follows a decade of development, with the 2016 two-tier proposal being credited with laying the groundwork for a universal standard for digital currencies and internal monetary circulation.
