Perspective | How the Digital Yuan (e-CNY) Is Integrating Into the Digital Economy

The “Announcement on Interest Calculation and Payment for Digital RMB” announced that, effective from... 2026 Year 1 Moon 1 Starting from today, interest will be paid on the balances of eligible digital RMB wallets. The “Action Plan on Further Strengthening the Digital RMB Management Service System and Related Financial Infrastructure Construction,” issued by the People’s Bank of China, has been released. 2026 Year 1 Moon 1 The initiative was officially launched today, clearly defining the measurement framework, management system, operational mechanisms, and ecosystem for the next-generation digital yuan. The digital yuan is a product of the integration of finance and technology, an inevitable outcome of the development of the digital economy, and also the blueprint outlined in the proposals of the 15th Five-Year Plan. To “accelerate the building of a financially strong nation,” we must “steadily develop the digital yuan.”

I. Development Path of Digital RMB

China’s mobile payment convenience and普及 rate have already reached a global leading position. So, what is the significance of launching the digital yuan? How does the digital yuan differ from the payment methods offered by third-party payment institutions? By linking interest payments to the digital yuan, its status as cash is effectively locked in. As a substitute for cash, how will the digital yuan play a role in the flow of production factors such as capital, labor, technology, land, and data? How can the digital yuan coexist and thrive alongside the digital economy, and what kind of impacts will it generate?

The digital RMB has been in deployment for over a decade. 2014 In [year], the People's Bank of China launched theoretical research and closed testing. 2016 In [year], the People's Bank of China proposed a theoretical framework for a legal digital currency—a digital payment tool with characteristics of a digital currency—and is cautiously, scientifically, and steadily conducting pilot trials to explore the digital yuan. e-CNY ) Management systems and operational mechanisms. Since the pilot operation began, its role has become increasingly evident. It will bridge the disconnect between the existing monetary system and the development of the digital economy, thereby achieving deep integration of digital economic development models.

II. Current Status of Third-Party Institution Payments (Non-Bank Payments)

Non-bank payment institutions refer to limited liability companies or joint-stock companies that, excluding banking financial institutions, have obtained a payment business license and engage in payment services—such as the transfer of monetary funds—based on electronic payment instructions submitted by either the payee or the payer. Our third-party payment services have evolved in tandem with the rapid development of the mobile internet, enabling convenient payments via handheld mobile devices in a wide variety of scenarios. For example, Alipay originated from the Taobao platform and has become deeply integrated into daily life, while Tenpay (WeChat Pay) has leveraged its social media platform to expand into a mainstream means of everyday payment. 2024 In China, the transaction volume of third-party integrated payment services reached 560.2 Trillion yuan, of which the scale of individual payment transactions is 356.6 Trillions of yuan—the scale of enterprise payment transactions is 203.7 Trillion yuan [i] In judicial practice, freezing the被执行人’s Alipay and WeChat Pay accounts has become an effective means of compelling the judgment debtor to fulfill their obligations under the legally enforceable documents.

One yin and one yang together constitute the Dao. The flourishing of third-party payment services has made our production and daily life more efficient and convenient; yet, hidden concerns behind this convenience have always been present. As the public increasingly shifts from cash transactions to digital payments solely for convenience, they’ve begun to lose track of the underlying cash flows. Payment institutions maintain reserve funds accounts at multiple banks, enabling commercial banks to leverage these “frozen funds” to further expand their lending scale—potentially even creating risks that deviate from the central bank’s intended policy objectives for credit growth. Second, the data generated by payment activities—including supply-demand and logistics information—reflects the overall state of the national economy. While external regulations mandate that platforms comply with legal standards for data security, how can we ensure objective and intrinsic data security? Given the inherent nature of data itself, trying to fix problems after they’ve already occurred may well be too little, too late. Moreover, third-party payment systems, through reserve funds accounts held at various banks, facilitate interbank fund settlements. In this process, described as “a slow-motion dance between left and right hands,” they effectively assume, in a disguised form, the clearing functions previously performed by the central bank or clearing organizations. Therefore, 2017 This year, the regulatory authorities launched the “Direct Connection Cutoff” initiative. Led by the China National Clearing Center of the People's Bank of China, the NetUnion Clearing System has taken over the transaction records of third-party payment institutions. 2018 The “Notice on Matters Relating to the Centralized Deposit of All Client Reserve Funds by Payment Institutions” was issued this year, requiring... 2019 Year 1 Moon 14 The day payment institutions' reserve funds are settled. 100% Deliver it to the central bank. The experience of Yu the Great in controlling the floods teaches us that while blocking is a short-term measure, unblocking is the fundamental solution to addressing the root cause of the problem. The digital yuan is precisely such a unblocking mechanism—it does not aim to replace existing third-party payment systems, but rather to reshape the payment landscape at a higher level and build “new infrastructure” for the development of the digital economy.

III. Digital RMB ( e-CNY ) Integration with the digital economy

(1) How digital RMB enters market circulation

The digital RMB is exchanged using a “one currency, two repositories” approach. “One currency” refers to the digital RMB directly issued and credit-backed by the People’s Bank of China. e-CNY ), which is a cryptographic digital string representing a specific monetary amount. Digital RMB is clearly distinct from virtual currencies created by blockchain technologies such as Bitcoin, and also different from stablecoins that are pegged to a basket of currencies or specific cryptocurrencies. Rather, it serves as the digital form of legal tender, equivalent to physical RMB and possessing unlimited legal tender status. The “two databases” serve as the channels through which legal tender is converted into its digital form: one is the issuance database maintained by the central bank, and the other is the commercial bank database.

The central bank’s dual-tier operating system only handles issuance and issues currency exclusively to commercial bank vaults, not directly to the public. The public can only exchange digital RMB at commercial bank vaults. According to the current digital RMB framework. APP Service Agreement, under which the commercial bank pool includes Zhejiang Net Commercial Bank Co., Ltd. of Ant Group and Shenzhen Qianhai Weizhong Bank Co., Ltd. invested by Tencent—clearly demonstrating that the digital RMB ( e-CNY The goal is to integrate into the existing payment system.

(2) The Function of Integrating Digital RMB with the Digital Economy

First, it possesses versatile hybrid currency capabilities: the digital RMB supports both account-based and blockchain-based models; it offers both software wallets and hardware wallets; and it enables both online and offline payments. To this end, the author has registered for the digital RMB. APP The platform offers both licensed, real-name wallets and anonymous wallets, both of which can be used for actual transactions. In particular, the offline payment feature is as convenient as using cash, ensuring that transactions remain secure even in situations where network connectivity is disrupted due to force majeure—thus addressing the inherent limitations of online payments. As long as both parties’ devices have power, they can still complete transactions via near-field communication technology, even if both devices are offline. NFC Enable dual offline payment.

Second, it possesses programmable currency capabilities. By leveraging smart contracts with digital RMB, we can digitize contracts and ensure their automatic and mandatory execution. This essentially mirrors a “conditional” contract under the law: once the conditions are met, the transaction is automatically completed; conversely, if the conditions are not fulfilled, even prepayments cannot be delivered or utilized. Moreover, this payment method will facilitate the performance of all contracts that involve progress-based payments, encouraging both parties to fulfill their respective obligations in good faith and with integrity, and helping to prevent deliberate delays, evasion of debt, and other malicious behaviors. It offers a fresh approach to achieving balance between parties with unequal bargaining power, and also provides a foundation for... Regulations on Guaranteeing Payment to Small and Medium-sized Enterprises It provides new means for implementing the provisions that safeguard the interests of small and medium-sized enterprises.

Third, the digital RMB features controllable anonymity. Drawing on blockchain technology and public-key cryptography, it ensures that wallet addresses remain publicly visible while concealing users’ true identities. Both the public key and the private key are jointly controlled by the central bank and the user. Transaction information includes only the public-key address and does not reveal the user’s real-name identity. As a result, no single commercial entity can trace the entire funds flow, thereby achieving transaction anonymity. This prevents third-party payment institutions from gaining complete access to all user information, customizing product recommendations in a way that could lead to monopolies, and threatening users’ privacy and security. At the same time, the anonymity of the digital RMB is relative: to ensure the security of large-value transactions, digital RMB users can open digital wallets of different levels, thus enabling “anonymity for small-value transactions while maintaining traceability for large-value ones.” In theory, it is possible to recover digital RMB illegally occupied by others due to illegal or infringing activities. In such cases, the digital RMB ceases to be a generic commodity and becomes a specifically identified asset empowered by digital technology.

Fourth, digital RMB is well-positioned for deep integration with the digital economy. Digital RMB has developed application models—covering both online and offline channels—that are replicable and scalable across various sectors, including wholesale and retail, catering and tourism, education and healthcare, public services, social governance, rural revitalization, and cross-border settlements. According to publicly available data from the central bank, as of... 2025 Year 11 At the end of the month, the cumulative number of transactions processed by digital RMB. 34.8 Hundreds of millions of transactions, cumulative transaction amount 16.7 Trillion yuan. Through digital RMB. APP Open a personal wallet 2.3 Hundreds of millions of digital RMB unit wallets have been opened. 1884 Ten thousand. The Multi-Central Bank Digital Currency Bridge ( mBridge ) Cumulative processing of cross-border payment transactions 4047 Pen, cumulative transaction amount converted into RMB 3872 hundred million yuan, of which the digital RMB accounts for approximately [a certain percentage] of the transaction volume across all currencies. 95.3% 。

Fifth, the digital yuan boasts direct accessibility and will become a new tool for realizing “investing in people” in the digital economy and society. Our monetary policy emphasizes directness and precision—only by acting swiftly and precisely can we truly achieve counter-cyclical adjustments. The digital yuan enables full-process monitoring of currency issuance. In an ideal scenario, the central bank could track the proper use of every single fiscal fund, thereby ensuring that each disbursement is used exactly as planned.

In short We say that the digital economy is not a virtual economy—it’s a new economic paradigm that integrates with the real economy and achieves high-quality development. Digital RMB is even more distinct from virtual currencies; from its very inception, it was designed to seamlessly integrate into the existing payment system and empower the development of the digital economy. As the scale of digital RMB’s usage continues to expand, it will inevitably reshape the ecosystem and ultimately become fully integrated into the grand vision of China’s digital economy.