China is pushing a centralized digital currency in a direct challenge to the U.S.-dominated global monetary system, with analysts watching whether adoption of the digital yuan picks up this year following major milestones in its development.
China’s central bank digital currency (CBDC), or e-CNY as it is often referred to, is Beijing’s answer to stablecoins. It has been years in the making. A beta version was first launched to the public in 2022 and since then, it has been integrated into some public-sector systems, including wage payments to public servants and government transactions.
By November 2025, China recorded 3.48 billion cumulative digital yuan transactions worth 16.7 trillion yuan ($2.37 trillion), up more than 800% from 2023 and making the e-CNY the world’s largest existing central bank digital currency experiment, according to statistics released by the People’s Bank of China and a report by the Atlantic Council, a U.S. think tank.
The jump was mainly due to the government-led initiatives. But “if the PBOC continues at this pace, it is possible to see a full-scale launch this or next year,” the Atlantic Council said.
That could add yet another element to the world’s superpower competition, as the U.S. takes a distinctly different approach.
“China’s e-CNY aspires to gain market share from the U.S.,” Andrew O’Neil, an analyst from S&P Global, told Nikkei Asia on the sidelines of Consensus Hong Kong, a cryptocurrency event held in the city earlier this month. The U.S. “prioritizes digital money through privately issued stablecoins.”
That is a key difference: While CBDCs are issued by a central bank and usually operate on private blockchains, stablecoins are issued by companies and rely on public, decentralized blockchains.
U.S. President Donald Trump signed an executive order at the beginning of his term banning the issuance of central bank digital currencies, citing threats to financial stability and privacy concerns.
The U.S. preference for stablecoins, which are designed to maintain parity with a conventional currency or asset such as gold, could also be considered an attempt to capitalize on the already dominant position of dollar-backed coins globally. According to the Bank for International Settlements, U.S. dollar-denominated stablecoins have taken an overwhelming position, with a nearly 99% share in terms of market capitalization and over 70% by count.
By contrast, China banned all “unapproved issuance of yuan-backed stablecoins” overseas by any individual or enterprise in a regulatory announcement earlier this month. While Beijing had at one point adopted more ambiguous rhetoric on stablecoins, it signaled at the end of 2025 that such tokens will be prohibited in the country like all other cryptocurrencies — a ban that began in 2021.
China’s CBDC drive stands as an outlier among major countries. Only three countries have launched central bank digital currencies so far: Nigeria, the Bahamas and Jamaica, according to the Atlantic Council’s tracker, and all are focused on expanding the digital currency’s reach within their countries. The EU has been preparing to launch a digital euro since 2023, but progress has been slow and the introduction is not expected until 2029.
Despite the significant growth of the e-CNY, adoption among retail users has been stagnant, as domestic consumers see little need to shift from leading private digital payment channels such as Alibaba’s Alipay and Tencent’s WeChat Pay. But Beijing is setting its eyes on a bigger prize.
A QR code for Alipay at a watch repair shop in Beijing: Domestic consumers see little need to shift from ubiquitous private digital payment channels. © ReutersCentral bank Gov. Pan Gongsheng said China is pushing for wider adoption of its central bank digital currency globally. This sits at the center of its wish to build a “multilateral monetary system.”
“While it takes time to change individual users’ payment behavior, enterprises’ adoption of e-CNY usage, especially cross-border transactions, could be more straightforwardly accelerated through transactional convenience and economic savings,” said Winston Ma, an adjunct professor at NYU School of Law.
“The Belt and Road supply chain players may become early adopters of e-CNY for cross-border transactions,” Ma added.
China is concurrently developing a project called mBridge: a central bank digital payment platform in collaboration with other governments and sovereign states, including Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia.
This puts Hong Kong, for one, in a unique position. While participating in mBridge and allowing limited cross-border use of e-CNY, Hong Kong is also pushing for its own regulated stablecoin issuance, although the initiative looks likely to fall short of early high expectations as regulators keep a tight grip and Beijing’s restrictions cast a shadow on companies operating in the territory.
Still, “Hong Kong has the unique opportunity to be the sandbox zone for all three forms of digital currencies — the sovereign CBDC of e-CNY, the stablecoins of corporations, and the cryptocurrencies on the public blockchains,” NYU’s Ma said.
Originally launched in 2021 under the aid of the Bank for International Settlements, mBridge adopted the Dashing protocol — a blockchain developed by the Chinese central bank and Tsinghua University — but is also compatible with Ethereum, an open-source blockchain platform.
Total transaction value through mBridge has grown roughly 2,500-fold since 2022 to approximately $55.5 billion in total, according to the Atlantic Council, and the digital yuan accounts for over 95% of the overall settlement volume.
“Looking ahead, mBridge is increasingly oriented toward trade settlement, particularly in energy and commodity-linked transactions, where China already plays a central commercial role,” the think tank’s January report reads.
Chinese authorities are also pushing e-CNY beyond being just a digital payment tool. On Jan. 1, the e-CNY started paying interest to holders, a feature that makes it more akin to bank deposits. This could make holding the digital yuan more appealing and even increase its adoption among retail users.
This comes as discussions in the U.S. drag on over whether stablecoins should pay interest. Opponents argue that allowing this would lead to significant outflows from banks and other financial institutions, which could pose a threat to financial stability.
While the e-CNY still has a long way to go, analysts believe it is here to stay. “Given its scale, sophistication, and integration into national strategy,” the Atlantic Council report says, “the digital yuan is likely to remain a central feature of China’s economy and of the global future of money debate for years to come.”
