China is set to include 12 more commercial banks under the umbrella of its central bank-backed digital currency to scale up adoption of the e-CNY or digital yuan, as it transitions from a cash alternative to an interest-bearing deposit instrument. The expansion comes after Beijing pledged to “steadily develop the digital yuan” in its latest five-year plan. A draft Finance Law recognizes the digital currency as fiat currency equivalent to cash, while a new framework supporting the wider campaign took effect in January. The additional banks would undertake functions such as opening wallets, currency exchange and payment processing. The new additions include seven national joint-stock commercial banks: China Citic Bank, China Everbright Bank, Huaxia Bank, China Minsheng Bank, China Guangfa Bank, SPD Bank and Zheshang Bank, according to Shanghai Securities News. Five city commercial banks – including the Bank of Ningbo – will also be added. Only 10 banks are currently integrated into the digital yuan network.
Under the central bank’s supervision, the commercial banks would be responsible for the e-CNY’s day-to-day operations as well as compliance checks related to areas such as anti-money laundering and identity verification. Pitched as a shift from “digital cash” to deeper integration into the regulated financial system, the January framework allowed authorized commercial banks that hold digital yuan to factor e-CNY wallet balances into their reserve requirement ratios and added interest-bearing similar to traditional bank deposits.
The framework could help tackle some of the challenges faced by the development of the digital yuan, said Yang Tao, Deputy Director of the National Institution for Finance and Development, in a report in the Tsinghua Financial Review. China is the first major economy to introduce a central bank digital currency. First piloted in 2019, the digital yuan was initially used for small-scale, everyday transactions such as retail payments, government disbursements, salary transfers and public transport fares. Supported by consumption coupons and tax rebates, the digital currency has since gained traction. By the end of November 2025, 3.48 billion transactions had been processed, totaling CNY16.7 trillion, according to the People’s Bank of China (PBOC). But China has greater ambitions for the e-CNY, with plans to use it in bonds, cross-border trade and other financial applications, opening an international operations center for the digital currency in September, the South China Morning Post reports.
