Nation expands digital yuan network
China's latest move to expand its digital yuan operator network by adding a dozen new banks signals an acceleration in the central bank's push to extend the digital currency's reach and embed it deeper into the country's financial infrastructure, according to official sources and experts.
The new financial institutions added to the network include seven national joint-stock commercial banks, such as China CITIC Bank, China Everbright Bank and Huaxia Bank, and five city commercial banks, including the Bank of Ningbo, the Bank of Jiangsu and the Bank of Beijing, the People's Bank of China, the country's central bank, announced on Thursday.
This expansion brings the total number of digital yuan operators to 22.
Previously, there were 10 authorized operators for the digital yuan — six State-owned commercial banks, two national joint-stock commercial banks, and two internet banks backed by Ant Group and Tencent.
The latest move aims to promote the steady development of the digital currency, improve the inclusiveness of its services, and meet public demand for secure, convenient and efficient digital yuan services, the central bank said.
The PBOC said it will "continue to expand the number of operators" in order to encourage broader market participation and support innovation.
The expansion follows an important shift in the nature of China's digital yuan earlier this year — a change that has significantly strengthened the incentive for financial institutions to promote adoption.
The digital currency, the pilot of which was launched in 2020, is designed to mimic physical cash as a noninterest-bearing and basically anonymous medium of exchange. However, in January, balances in realname digital yuan wallets began earning interest at the same rate as standard bank savings accounts.
Lou Feipeng, a researcher at the Postal Savings Bank of China, said this shift has altered the calculus of the banks involved.
Previously, the banks had limited incentive to promote digital wallets, as the funds would leave their deposit base while requiring substantial investment in technology and staff training, Lou said.
"Now, digital yuan deposits are counted as on-balance-sheet liabilities, and banks can earn a spread between the interest they pay and the returns they can generate from lending those funds," he added.
Lou also highlighted that the interest-bearing feature is expected to boost people's usage, particularly for everyday payments and small-balance savings. "Unlike physical cash, which earns nothing, digital yuan deposits now offer a modest return while remaining fully liquid and State-guaranteed," he said.
As of December, cumulative digital yuan transactions had reached 19.5 trillion yuan ($2.8 trillion), with individual transactions worth 3.57 billion yuan, according to the central bank. During the same period, the digital yuan app had 230 million personal wallets and 19.08 million corporate wallets.
This expansion aligns with the directive in the 15th Five-Year Plan (2026-30) to "steadily develop the digital yuan", a shift from the previous plan's more cautious language of "prudently advancing research and development of the digital yuan".
The inclusion of joint-stock and city commercial banks in the network brings distinct advantages to the ecosystem, experts said.
Dong Ximiao, chief economist at Merchants Union Consumer Finance, noted that these institutions have extensive customer bases, local government cooperation resources and differentiated service capabilities.
"Their inclusion will help improve the digital yuan program's operating architecture and create broader service capabilities," he added.
However, Dong cautioned that developing digital yuan operations demands a comprehensive upgrade of technical capabilities, business models and resource coordination — a challenge that the newly authorized banks must now meet.
With user numbers and transaction volumes poised for notable growth due to the expanding operator network, Tian Lihui, a professor of finance at Nankai University, said that digital yuan application scenarios will extend from established retail and government service channels to supply chain finance, cross-border trade, green credit and utility payments.
wangkeju@chinadaily.com.cn
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