Digital yuan use gathering pace

China's digital yuan is gaining traction in cross-border use as a growing number of transactions point to broader and more regular commercial applications, potentially bolstering the renminbi's role in international settlement and payments, experts said.

The development comes as recent volatility in the United States Treasury market has renewed discussion about diversification of the international monetary system. Central bank digital currencies — including e-CNY or the digital yuan — have been viewed as one possible avenue for supporting a more diversified system, given their potential to make cross-border payments faster, less costly and more secure.

Against this backdrop, Ping An Bank recently said that its Hangzhou branch in Zhejiang province had made the first e-CNY transaction in the lender's cross-border business. Using the Multilateral Central Bank Digital Currency Bridge (mBridge), the branch had processed a goods trade settlement for a high-end manufacturer in Jiaxing, Zhejiang.

Ping An Bank said the transaction shortened the intermediate clearing chain and significantly improved transaction security and settlement efficiency compared with conventional cross-border remittances.

The mBridge project is a new type of multicurrency international cross-border infrastructure leveraging blockchain technology, allowing direct transactions in local digital currencies.

The platform's cumulative transaction value had reached almost 500 billion yuan ($74.4 billion) by end-2025, with more than 95 percent of the transactions made using e-CNY as of end-November 2025, according to the People's Bank of China.

This month, the Beijing Municipal Branch of the PBOC said that Postal Savings Bank of China's Beijing branch had completed the city's first mBridge cross-border transaction involving the Macao Special Administrative Region, making a payment to a Macao company related to public transport card settlement.

Last month, Industrial Bank also announced that it had launched in Guangzhou, Guangdong province mBridge payment services to the Macao SAR, while having lately used the platform to process a 500 million yuan cross-border transfer for an equity acquisition involving an industrial park.

"Together, the cases show that cross-border e-CNY payments have moved beyond proof-of-concept testing into real-value transactions, and are accelerating toward regular, large-scale use," said Lou Feipeng, a researcher at Postal Savings Bank of China.

"The next breakthroughs are likely to come from deeper expansion of application scenarios," Lou said, as the digital yuan is extending usage from goods trade into services trade, cross-border investment and financing, commodity transactions, shipping insurance and other financial activities.

Further progress will also require broader infrastructure connectivity and a stronger institutional ecosystem, including cross-border anti-money laundering cooperation, he added.

Policy and institutional support have been strengthened. At its work conference held this month, the PBOC called for improving cross-border digital yuan infrastructure. The central bank subsequently expanded the number of e-CNY operating institutions to 30, broadening the banking network that could develop related applications.

Miao Yanliang, chief economist at China International Capital Corp, said, "The digital yuan has the potential to expand the RMB's role in international settlement and payments, with its programmability enabling fast and secure large-value cross-border transactions."

However, Miao said that the key challenge is interoperability — connecting different payment infrastructures across jurisdictions while bridging differences in technical standards and compliance regimes, thereby broadening the range of markets and users the digital yuan can serve.

zhoulanxv@chinadaily.com.cn