China is set to launch an action plan on January 1, 2026 for yuan, aiming to strengthen digital currency’s management and operational framework, as reported by Financial Times, a publication run by the People’s Bank of China.
The recent push on the part of China’s central bank also signals a renewed push to expand the use of digital yuan.
Key features of ‘action plan’
Under the upcoming strategy, the digital yuan would be used for payment purposes within the country’s financial system. Moreover, the plan would also include the launch of a “new generation” structure for the currency, according to People’s Bank of China (PBoC) Deputy Governor Lu Lei.
“The future digital yuan will be a modern digital payment and circulation means issued and circulated within the financial system,” Lei added.
The newly-proposed plan will also encompass a comprehensive “measurement framework, management system, operating mechanism and ecosystem,” for digital yuan, improving state-backed digital currency’s efficiency.
The plan also calls for establishing an international digital yuan operations in Shanghai, aiming to support cross-border collaboration, research, and future use of currency beyond domestic level.
In addition, banks will also pay interest on balances held by clients in digital yuan. This move will incentivise broad-spectrum adoption of the currency.
financial authorities have been exploring the ways to digitalise currencies driven by the recent boom in online payments and increased popularity of bitcoin.
China’s central bank has been testing since 2014 the use of a “digital yuan or e-CNY” in various programmes. Residents can use digital currency for transport, retail purchases, and utility payments.
The action plan will modernize China’s monetary system.