China upgrades e-CNY infrastructure for digital deposit era

China has upgraded its digital yuan infrastructure to support the e-CNY's new role as digital deposit money, paving the way for more digitalized, systematic, intelligent and diverse applications, officials and experts said.

For the next stage, the People's Bank of China — the country's central bank — will support commercial banks in integrating the digital yuan across their operations, including deposits, loans, remittances and investments, and encourage more licensed financial institutions to participate in an orderly manner, they said.

During the e-CNY Annual Conference 2026 last week, which was part of the Annual Conference of Financial Street Forum 2026, e-CNY Center Co Ltd released the Digital Currency& Electronic Payment System, or DCEPS, and the e-CNY SMART Contract service framework.

The infrastructure upgrade follows a key transition of the e-CNY. Pan Gongsheng, governor of the PBOC, said last week that the e-CNY had shifted from digital cash to digital deposit money at the beginning of the year.

Under the new framework, customers' e-CNY holdings in commercial bank wallets are liabilities of those banks, with balances in real-name wallets earning interest.

Lu Lei, deputy governor of the PBOC, said at the conference that the shift addresses commercial lenders' concerns that digital cash could draw deposits away from them, while bringing their rights, responsibilities and benefits into better balance under an upgraded dual-layer operating framework.

Lu said the upgrade has also deepened the digital yuan's account-based hybrid development path, with the e-CNY supporting both on-chain and off-chain — as well as online and offline — intelligent payment requirements.

The digital RMB infrastructure has been upgraded accordingly to become the first comprehensive central bank payment and settlement platform that integrates functions such as issuance management, retail, wholesale, blockchain, cross-border transactions and smart contracts, he said, adding that the infrastructure system mainly includes DCEPS and Cross-border e-CNY Transfer Services, or CBETS, a cross-border settlement platform.

At the heart of the upgraded infrastructure, DCEPS enables payments and settlements between institutions, supports smart contract applications and e-CNY digital asset services, and provides a common platform for managing liquidity, e-CNY issuance and wallets, alongside providing data services and intelligent risk controls.

Built and operated by e-CNY Center Co Ltd, DCEPS operates around the clock and allows participants to connect once and access multiple services. It also provides the technical infrastructure supporting CBETS.

The e-CNY SMART Contract framework, meanwhile, is aimed at creating a trustworthy smart contract services system that ensures contracts are automatically executed as agreed when the stipulated conditions are met, built on standardized rules and open to different entities, technical approaches and application scenarios.

Applications are already in place across scenarios such as prepaid fund management, supply chain finance, fiscal subsidies, consumption coupons and migrant worker wage payments, with plans to expand into more use cases.

As of end-September, cumulative digital yuan transactions in regions where it is in use had reached 4.3 billion, with a total value of about 31 trillion yuan ($4.65 trillion). In September alone, 99.67 million transactions worth 1.87 trillion yuan were processed, up 12 percent and 123 percent from a year earlier, respectively.

On the cross-border front, CBETS signed agreements with its first 26 direct participants in June.

Zhu Min, former deputy managing director of the International Monetary Fund, said the development of the digital renminbi is of particular importance to the internationalization of the Chinese currency, with the e-CNY's fast-maturing digital infrastructure giving its global use a new engine of momentum.

Liu Jun, president of Industrial and Commercial Bank of China, said the lender is committed to turning the new opportunities brought by the e-CNY upgrade into fresh drivers of its digital transformation. With a six-year pilot, the bank handled over 11 trillion yuan in digital renminbi transactions.

Wang Yubo contributed to this story.

zhoulanxv@chinadaily.com.cn