China Launches Deposit-Based Digital RMB with Blockchain Integration Under 2026 Action Plan

TLDR:

• Digital RMB transitions from cash to deposit money model under Action Plan effective January 1, 2026
• Two-tier architecture integrates e-CNY into reserve requirements with deposit insurance protections
• Hybrid system combines account management with blockchain through smart contracts and coin strings
• mBridge platform processed 4,047 cross-border transactions with e-CNY at 95.3% of total volume

China’s central bank officially launched a new framework for its digital currency on January 1, 2026. The People’s Bank of China announced the transition of digital RMB from a cash-based system to deposit money model.

This change comes through the Action Plan for Further Strengthening the Digital RMB Management and Service System. The upgrade introduces blockchain technology and smart contract integration within a two-tier banking architecture. 

The policy directive calls to “steadily develop the digital RMB (e-CNY)” as part of efforts to “accelerate the building of a strong financial nation.”

Two-Tier Architecture Reinforces Financial Stability

The digital RMB operates through a central bank-commercial bank structure differing from decentralized cryptocurrencies. 

The People’s Bank of China pioneered the “Central Bank-Commercial Institution” two-tier operating system globally. Commercial banks open e-CNY wallets and bear responsibility for security and compliance, with deposit insurance providing protections as traditional deposits.

The new measurement system categorizes wallet balances into monetary aggregates based on liquidity. Bank-type institutions calculate required reserves from e-CNY wallet balances, while non-bank payment institutions implement 100% reserve requirements. 

This arrangement prevents financial disintermediation risks from currency circulation outside traditional banking systems.

Banking institutions pay interest on real-name e-CNY wallet balances according to deposit rate pricing conventions. 

This creates compatible incentives between cash payment and bank account income benefits. The structure allows banks to conduct independent asset-liability management.

Hybrid Model Combines Accounts with Blockchain Technology

The e-CNY employs an “Account System + Coin Strings + Smart Contracts” technical solution, according to the Action Plan. 

This hybrid approach utilizes traditional bank account management advantages while incorporating blockchain efficiency. 

The system maintains centralized oversight for retail transactions while enabling blockchain operations in specific scenarios.

The platform processed 3.48 billion transactions totaling 16.7 trillion yuan as of November 2025. Users opened 230 million personal wallets and 18.84 million corporate wallets. 

The technology supports applications across wholesale, retail, tourism, healthcare, and public services.

The account-based foundation enables integration with existing banking infrastructure. Smart contracts facilitate precision targeting in supply chain finance and carbon inclusion systems. Coin strings provide regulatory transparency for closed-loop applications.

Cross-Border Applications Expand Through mBridge Platform

Shanghai’s Digital RMB International Operation Center advances blockchain implementation for cross-border settlements. 

The mBridge project processed 4,047 international payment transactions worth 387.2 billion yuan equivalent. Digital RMB accounted for 95.3% of transaction volume across participating currencies.

The blockchain service platform built on “Chengfang Chain” enables “Unified Ledger, Segmented Business” operations. 

It provides 24/7 operation capabilities and single-point connection. The system supports on-chain issuance and settlement of bills, trade finance instruments, and carbon emission rights.

The platform facilitates cross-border investment and financing while supporting offshore financial innovations. 

The separation of management and operation provides what officials describe as “controllable yet innovative” capability. Development will prioritize meeting real economy needs through both account-based and blockchain approaches.

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