China’s central bank, the People’s Bank of China (PBOC), has sent a clear policy signal that it intends to significantly expand the use of the digital yuan beyond domestic borders in 2026. The latest announcement follows earlier reports of the first cross-border transaction involving the digital yuan, carried out as part of a pilot project in Laos, and reinforces Beijing’s long-term ambitions in digital payments.
The commitment was outlined during a two-day PBOC conference held on January 5–6, 2026, which focused on setting monetary policy directions and reform priorities for the year ahead. The meeting was chaired by PBOC Governor Pan Gongsheng, who confirmed that the digital yuan remains one of the central bank’s key strategic initiatives.
Digital yuan eyes international expansion
According to the official conference statement, the PBOC will “steadily advance the development of the digital RMB” while accelerating the construction of infrastructure to support its cross-border use. The central bank plans to facilitate the use of the yuan in international trade and investment scenarios and encourage financial institutions to strengthen cross-border financial services.
As part of this strategy, the PBOC also announced it would welcome more qualified foreign entities to issue so-called panda bonds—yuan-denominated bonds sold in China by overseas issuers—aiming to further enhance the yuan’s role in global capital markets.
Currency swaps and payment systems beyond the dollar
The PBOC plans to make greater use of bilateral central bank currency swap agreements to promote the use of the yuan in international trade and investment. These arrangements allow participating countries to exchange currencies directly, reducing reliance on the US dollar as an intermediary.
The central bank is also working to improve the interoperability of fast payment systems and promote international cooperation on QR-code-based payments. PBOC officials said they will actively coordinate with foreign monetary authorities to establish technical and regulatory frameworks that support transactions conducted in digital yuan.
e-CNY remains a cornerstone of China’s CBDC strategy
China is among the global frontrunners in central bank digital currency development. The digital yuan, also known as e-CNY, has been in pilot testing since 2020 across multiple Chinese cities. Its use cases now range from retail payments and public transportation to selected government expenditures. Cross-border functionality, however, has remained limited so far—a gap the PBOC aims to address in 2026.
China’s monetary policy outlook for 2026
The PBOC also confirmed it will continue to pursue a moderately accommodative monetary policy in 2026. To maintain ample liquidity, the central bank said it will flexibly and efficiently deploy tools such as reductions in banks’ reserve requirement ratios and interest rate cuts.
The conference emphasized the need to improve the quality of financial services for the real economy, with a focus on five strategic areas: technology financing, green finance, inclusive finance, pension finance, and financing for the digital economy. In 2025 alone, more than 700 entities reportedly issued innovation bonds totaling over 1.5 trillion yuan, primarily to support science and technology initiatives.
Market opening alongside tighter crypto oversight
The PBOC’s 2026 agenda also includes optimizing the Bond Connect and Swap Connect mechanisms, which provide foreign investors with access to China’s bond and derivatives markets via Hong Kong. The central bank further announced plans to support the development of Shanghai as an international hub linked to the International Monetary Fund.
At the same time, the PBOC reiterated its intention to strengthen oversight of virtual cryptocurrencies, continue cracking down on related illegal activities, and introduce stricter anti-money-laundering measures. This stance once again highlights China’s clear distinction between promoting a state-controlled digital currency and maintaining a restrictive approach toward cryptocurrencies operating outside the official financial system.
#china ,
#CBDC ,
#GlobalFinance ,
#CryptoNews ,
#Yuan Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“