The People's Bank of China has formalised a policy to develop the digital yuan, its central bank digital currency (CBDC), steadily over the next five years. By treating the digital yuan not as a simple pilot programme but as a core task in revamping financial infrastructure, it is expected to accelerate efforts to upgrade domestic payment networks and expand cross-border use.

On Aug. 10 local time, blockchain outlet Cryptopolitan reported that the People's Bank of China listed the steady development of the digital yuan as one of its key tasks in its recently released 15th five-year reform and development plan.

In the plan, the digital yuan was included as a priority for reforming financial infrastructure and central bank services. The central bank plans to expand the role of the digital yuan as it improves payment systems, supports the credit-rating industry and strengthens anti-money laundering rules. This means the digital yuan is being incorporated into the institutions and infrastructure of China's financial system, beyond an experimental payment tool used in specific regions.

Expanding cross-border use is cited as a key pillar. The People's Bank of China said it plans to expand use of the yuan in trade and investment, build a cross-border payment network and develop the offshore yuan market. It will also pursue steps to strengthen Shanghai's role as an international financial centre and boost Hong Kong's role as an international financial hub. This means the expansion of overseas use of the digital yuan is being pursued not only as a spread of the CBDC itself but in connection with the yuan's internationalisation strategy.

China has also begun work since early this year to increase the digital yuan's institutional usability. In early 2026, an institutional framework was 마련돼 to allow commercial banks to pay interest on customers' digital yuan balances. This is seen as a move to give the digital yuan, which had remained an electronic payment tool, characteristics of deposits and additional financial usability.

The digital yuan project dates back to 2014. The People's Bank of China began research into a digital currency under the name DCEP at the time and officially launched the digital yuan in April 2022. It has since expanded its user base by using distribution policies such as paying out the digital yuan in several pilot cities.

Discussions are also under way on fixing its legal status. At the 2026 National People's Congress, deputy Fu Shiguo proposed revising the People's Bank of China Law. He pointed out that the current law, which has not been revised since 2003, does not explicitly define the digital yuan as legal tender.

This suggests the legal foundation is lagging behind the pace at which the digital yuan's actual use is expanding. If the law is revised, the institutional status of the digital yuan and the roles of financial institutions are expected to become clearer.

Proof-of-concept projects at the local-government level are also continuing. Guangdong province, in a draft five-year plan that is taking public comments until Sept. 5, set out a policy to expand cross-border digital yuan payment experiments and increase related use cases. This is a structure in which the central government's digital yuan policy is linked to concrete proof-of-concept projects by local governments.

Cross-border payment cases are also emerging. China conducted its first cross-border payment based on the digital yuan with Singapore, and branches of Industrial and Commercial Bank of China settled shipping costs of about 10 million yuan through an upgraded CBETS platform. A total of 26 financial institutions joined the system for the first time last June.

Use is also expanding for mBridge, a multi-CBDC payment platform. mBridge, which includes mainland China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia, recently extended its service scope to Macau via Industrial Bank. The platform was also used to transfer 500 million yuan related to stock trading.

The number of Industrial Bank's corporate customers related to this rose 176 percent in the first half of this year from a year earlier. The Fujian branch of Bank of China also processed more than 10 billion Hong Kong dollars through mBridge. Bank of China said this was the platform's largest single remittance on record. As China expands both the digital yuan and cross-border payment infrastructure, the scale of actual transactions is also gradually growing.

The key variables going forward are the pace of institutionalising the digital yuan and the scope of overseas use. As the People's Bank of China used the phrase "develop steadily", it is more likely to expand payment-infrastructure upgrades, legal and institutional revisions and cross-border proof-of-concept projects in stages rather than fully shifting the existing financial system to the digital yuan in a short period.

If use expands for international payment infrastructure such as cross-border payment networks and mBridge, the digital yuan could become financial infrastructure supporting the yuan's internationalisation, beyond a domestic payment tool in China.

The next five years are expected to be the period when decisions are made in earnest not only on the digital yuan's technical spread but also on its legal status, the scope of use by financial institutions and whether it is incorporated into overseas payment networks.