According to insiders, China will permit more banks to deal with digital yuan
China is preparing to expand the reach of its digital currency, the digital yuan (e-CNY), by allowing around 12 additional banks to participate in handling and promoting its use, according to sources familiar with the development. This move is part of a broader push led by the People's Bank of China to accelerate adoption of the state-backed digital currency, especially as it seeks to strengthen its position both domestically and globally.
The new banks expected to join the initiative include major institutions such as Shanghai Pudong Development Bank, China Everbright Bank, and Bank of Ningbo. These will be added to the 10 banks that are already authorised to work with the digital yuan. Among the new entrants, a mix of joint-stock banks and city commercial banks has been selected, indicating a broader effort to expand access across different tiers of the banking system. However, the exact timeline for their official onboarding has not yet been disclosed.
China first launched the digital yuan in 2019, but its adoption has been relatively gradual. One of the key reasons is that consumers in China already have access to highly efficient and widely used digital payment platforms such as Alipay and WeChat Pay, which offer seamless and low-cost transactions. As a result, convincing users to shift to a new payment system has been challenging despite government support.
However, experts believe that the real potential of the digital yuan lies beyond domestic retail usage. It could play a significant role in cross-border payments, offering an alternative mechanism for settling international transactions without relying on traditional systems dominated by the U.S. dollar. This includes reducing dependence on global financial infrastructure such as SWIFT, which is widely used for international money transfers. By promoting the e-CNY, China aims to create a parallel system that enhances financial sovereignty and reduces exposure to external financial pressures.
The expansion of the digital yuan ecosystem also comes alongside China’s strict stance on private cryptocurrencies. The government has implemented a sweeping crackdown on virtual currencies and banned stablecoins, effectively limiting the role of private digital assets within its financial system. This approach stands in sharp contrast to the United States, where policymakers have taken a different route. Under Donald Trump, there has been support for private cryptocurrencies while avoiding the launch of a central bank digital currency (CBDC), leaving more room for private sector innovation.
China is also taking steps to make the digital yuan more attractive. From January 1, holdings of e-CNY have been made interest-bearing, a move designed to encourage wider usage. Additionally, the central bank established an operational hub in Shanghai last year to promote the currency’s international use and strengthen its infrastructure.
Despite these efforts, the scale of adoption still highlights the gap between the digital yuan and traditional payment systems. As of November last year, cumulative transactions using e-CNY reached about 16.7 trillion yuan (approximately $2.4 trillion). While this is a substantial figure, it remains relatively small compared to the 128 trillion yuan processed through overall payment systems in China in 2025 alone.
Analysts suggest that the long-term goal is not just to improve payment efficiency but to support the internationalisation of China’s currency and gradually build an alternative financial ecosystem. By expanding participation among banks and enhancing features, China is positioning the digital yuan as a strategic tool that could reshape cross-border trade and reduce reliance on dollar-dominated systems over time.
