The People's Bank of China makes a major announcement! New Digital RMB framework to be launched on New Year's Day 2026

On December 29, the People’s Bank of China announced that the new digital yuan framework will be launched on January 1, 2026, emphasizing central bank regulation, commercial bank liability attributes, account-based features, and compatibility with distributed ledger technology. The Hong Kong Monetary Authority also implemented the Basel crypto-asset new regulations on the same day, bringing Bitcoin, Ethereum, RWA, and stablecoins into banking capital regulation.

Lu Lei’s Clarification: Parallel Development of Account-Based and Value-Based Digital Currencies

The People’s Bank of China will introduce the “Action Plan for Further Strengthening the Digital Yuan Management Service System and Related Financial Infrastructure.” The new generation digital yuan measurement framework, management system, operational mechanism, and ecological system will officially commence on January 1, 2026.

Vice Governor of the People’s Bank of China, Lu Lei, revealed the future technological roadmap for the digital yuan. He emphasized that the future digital yuan will be a modern digital payment and circulation tool issued and circulated within the financial system, with functions of currency value, supported by central bank technology, regulated, and possessing commercial bank liability attributes. It will be account-based and compatible with distributed ledger technology features.

This statement contains several key points. First, “account-based” means that the digital yuan is not a fully anonymous value-based currency but is linked to user identities, making it an account-based currency. This design aligns with China’s regulatory and anti-money laundering requirements but also raises privacy concerns. Second, “compatible with distributed ledger technology features” indicates that although issued centrally by the central bank, the digital yuan’s technical architecture draws on certain blockchain characteristics such as immutability and transparency.

Lu Lei particularly emphasized that, looking ahead, the technological development of the digital yuan will adhere to the principle of meeting real economic needs, adopting a cautious and inclusive approach to the development of both account-based and value-based digital currencies, promoting the digital yuan to meet various scenarios and different business entities’ needs. This “inclusive” approach suggests that China’s central bank has not completely ruled out the future issuance of more privacy-oriented, value-based digital currencies but will proceed cautiously based on actual needs and risk assessments.

This dual-track design reflects the challenge of balancing privacy and regulation in digital currencies. Fully anonymous, value-based currencies protect privacy but may be exploited for money laundering and tax evasion. Fully identity-verified, account-based currencies facilitate regulation but may raise public privacy concerns. China’s central bank’s “compatibility” strategy, offering different levels of anonymity in different scenarios, is a pragmatic compromise.

Hong Kong to Implement Basel Crypto-Asset Regulations on January 1, 2026

On December 29, according to Caixin, the Hong Kong Monetary Authority confirmed that starting January 1, 2026, it will fully implement new bank capital regulations based on the Basel Committee on Banking Supervision’s crypto-asset supervisory standards. The Basel definition of crypto-assets refers to private “digital assets” primarily relying on cryptography and distributed ledger technology or similar, while “digital assets” are defined as a form of digital value used for payments, investments, or acquiring goods or services.

This definition is very broad. Not only do cryptocurrencies like Bitcoin and Ethereum fall under Basel’s definition of crypto-assets, but RWA (real-world asset tokenization), stablecoins, and others are also included. This means that banks in Hong Kong engaging in crypto-asset activities will need to hold capital according to Basel standards, significantly raising the entry barriers and costs for banks entering this field.

Hong Kong and Mainland China are simultaneously implementing new regulations for digital currencies and crypto-assets (January 1, 2026). This coordinated timing is no coincidence, indicating strategic alignment between China’s central bank and Hong Kong’s monetary authority in digital financial regulation. As an international financial hub, Hong Kong’s regulatory framework will provide an important bridge for cross-border use of the digital yuan.

Three Major Features of the New Digital Yuan Framework in 2026

Technological Compatibility: Account-based, compatible with distributed ledger technology, with dual tracks to meet different scenario needs

Clear Regulation: Central bank provides technical support and regulation, with commercial banks bearing liability attributes, issuing and circulating within the financial system

Real Economy Orientation: Insists on meeting real economic needs as the starting point, rather than purely financial speculation tools

Basel standards generally impose high capital requirements on crypto-assets, reflecting regulators’ cautious attitude toward crypto risks. These high capital requirements may limit banks’ large-scale participation in crypto activities but also ensure financial stability. For banks wishing to develop crypto businesses in Hong Kong, January 1, 2026, marks a crucial turning point, after which operations must be compliant.

Supreme Court Promotes Inclusion of Virtual Property into Commercial Law System

On December 28, the Supreme Court’s academic journal “Digital Law” published an article titled “Legal Reform of Commercial Law for Digital Transactions, Electronic Money, and Virtual Property,” which states: The United States Uniform Law Commission and the American Law Institute jointly revised the “Uniform Commercial Code,” which was officially adopted in 2022 and widely enacted by U.S. state legislatures. It includes provisions for various transaction methods, including electronic forms, clarifies the relationship between tangible currency, central bank digital currency, and other virtual currencies, and establishes a new property type called “Controllable Electronic Records.”

The article emphasizes that China’s civil and commercial regulations should also adapt to the development of digital transactions, electronic money, and virtual property, with practical legal improvements to stimulate economic and technological development and gain an advantage in international regulatory competition. This indicates that China’s legal system is actively paving the way for the legalization of digital assets and virtual property.

The stance of the Supreme Court is highly symbolic. In China’s legal system, judicial interpretations and academic publications from the Supreme Court often signal legislative directions. This publication explicitly draws on the experience of the U.S. “Uniform Commercial Code” to create a suitable legal framework for virtual property in China, demonstrating that China is accelerating its legal construction for digital assets.

These three simultaneous events—Lu Lei’s announcement of the new digital yuan framework, Hong Kong’s implementation of Basel crypto-asset regulations, and the Supreme Court’s push for virtual property legislation—form a comprehensive policy package. China’s central bank offers an official digital currency through the digital yuan, manages banks’ crypto risk exposure via Basel standards, and provides legal certainty for virtual property through legal reforms. This multi-layered regulatory framework shows that China is building a comprehensive institutional foundation for the digital financial era.