At present, the global monetary and payment system is undergoing profound digital transformation. Competition surrounding crypto-assets and central bank digital currencies (CBDCs) is intensifying, becoming a strategic arena that directly concerns national financial sovereignty, payment efficiency, and international competitiveness. After more than a decade of exploration, China’s e-CNY has achieved a critical leap from technical verification to large-scale application. The three principles proposed by the People’s Bank of China— “no disruption, compliance, and interoperability”, have become fundamental guidelines for the construction of cross-border infrastructure for sovereign digital currencies. Reports by the Bank for International Settlements indicate that the cross-border financial infrastructure system for the e-CNY, initially established on the basis of these principles, has begun to influence the formation of global digital currency governance rules. As of the end of November 2025, the e-CNY had cumulatively processed 3.48 billion transactions, with a total transaction value of CNY 16.7 trillion. A total of 230 million personal wallets had been opened through the e-CNY app, and 18.84 million institutional wallets had been established. The mBridge had cumulatively processed 4,047 cross-border payment transactions, with a total transaction value equivalent to CNY 387.2 billion, of which e-CNY transactions accounted for approximately 95.3% of the total across all participating currencies.
As a major innovation in national financial infrastructure, the e-CNY not only carries the mission of enhancing the efficiency of the domestic payment system and deepening financial inclusion, but also demonstrates unique value in reshaping the cross-border payment landscape. This aligns closely with the strategic deployment of “steadily develop the e-CNY” of the “15th Five-Year Plan”. The traditional cross-border payment system has long relied on a multi-layer correspondent banking model, suffering from systemic pain points such as lengthy processes, high costs, low efficiency, and insufficient transparency. These shortcomings make it difficult to meet the rapidly growing needs of small and medium-sized enterprises engaged in cross-border trade, as well as individuals making frequent, small-value remittances. With the rapid popularization of artificial intelligence technologies, the general trend toward digitalization and intelligence in the traditional financial industry requires payment instruments that are more intelligent. Leveraging peer-to-peer payment and real-time gross settlement mechanisms, the e-CNY significantly reduces intermediary links. By integrating cryptographic technologies with controllable anonymity, it enhances transaction traceability and compliance monitoring while safeguarding user privacy and data security, thereby supporting global regulation cooperation in anti–money laundering and combating the financing of terrorism. Its programmability provides a solid foundation for innovations in trade finance and industrial digital finance—such as smart contracts and conditional payments—offering superior payment tools for financial intelligence.
With the deepening of a new round of e-CNY pilot reforms beginning in January 2026, the positioning of the e-CNY will no longer be limited to cash in circulation (M0). The implementation of a partial reserve system will introduce new channels for the issuance and creation of the CNY. Allowing operating institutions to pay interest on e-CNY holdings in wallets will further increase users’ willingness to hold it. The inclusion of e-CNY in wallets as liabilities on commercial banks’ balance sheets will promote innovation in e-CNY products, including credit and payment services. The establishment of a fee mechanism will further strengthen operating institutions’ incentives to promote the use of the e-CNY. An increase in the number of operating institutions will drive simultaneous growth in coverage and usage, enabling services to reach more institutions and individual residents. The establishment of international operating centers and the continuous expansion of the “mBridge” network will position the e-CNY as a “digital bridge” connecting more countries. From a technological perspective, should China’s banking industry engage in tokenized deposit and lending businesses in the future, the e-CNY will also serve as an important supporting tool for such businesses. As these reform measures are gradually implemented, the legal tender functions of the e-CNY will be further unleashed.
At the same time, it must be recognized that as a brand-new form of the CNY, the e-CNY differs significantly from traditional CNY in terms of issuing institutions, issuance channels, business models, product characteristics, technical standards, and security safeguards. These differences pose new challenges for issuers, operating institutions, users, and even monetary authorities. The widespread future application of the e-CNY will place considerable challenges on the technical capabilities and security safeguard measures of a single centralized issuing institution. The increase in the number of operating institutions likewise requires their technical strength to meet the operational requirements of the e-CNY. Moreover, entirely new methods and channels of currency issuance will bring fresh challenges to central bank monetary policy transmission, monetary statistics, and macroeconomic regulation. Attention must also be paid to potential deposit outflows from small and medium-sized banks that may be unable to meet the requirements for independent e-CNY operations. Only by coordinating development and security, grasping the historical trends in the evolution of the international monetary system, enhancing the quality and efficiency of e-CNY management and services, and promoting its ability to meet the needs of different scenarios and market participants, can the e-CNY better serve the real economy and fulfill its strategic value and historical mission.
Author Profile
Jianhua Zhang, Ph.D. in Management, Research Professor, Doctoral Supervisor, and expert enjoying the Government Special Allowance of the State Council. He currently serves as Director of the Research Center for Financial Development and Regtech at the Tsinghua University PBC School of Finance, Editor-in-Chief of “Tsinghua Financial Review”, and concurrently as Counselor of the People’s Bank of China and Secretary-General of the Digital Finance Cooperation Forum. He has previously held positions including Director of the Research Bureau of the People’s Bank of China, Director of the Hangzhou Central Sub-branch of the People’s Bank of China and Director of the Zhejiang Branch of the State Administration of Foreign Exchange, President of Beijing Rural Commercial Bank, and President of Huaxia Bank. Jianhua Zhang possesses extensive theoretical foundations and practical experience in financial regulation, digital finance, monetary policy, commercial bank management, and deposit insurance, and has published numerous monographs and academic papers.
