A Full Upgrade: What's New With the Digital RMB as the PBOC Launches DCEPS and the Smart Contract Ecosystem Framework

On October 19, PBOC Governor Pan Gongsheng said at the 2026 Financial Street Forum annual meeting that the digital RMB infrastructure and service system had been comprehensively upgraded.

How was the system upgraded? The answer came at the Digital RMB Annual Conference of the 2026 Financial Street Forum on October 21: the digital RMB is no longer "digital cash in your pocket" but has evolved into a more complete and intelligent "digital financial infrastructure."

Notably, at the conference, the Digital RMB Operations Management Center released two core achievements — the central-bank-side digital RMB system (DCEPS) and the digital RMB smart contract ecosystem service framework (e-CNY SMART Contract) — which can be seen as the digital RMB's "new foundation" and "new toolbox." This marks that the digital RMB's infrastructure and ecosystem applications have become more digitalized, systematized, intelligent and diversified.

Why upgrade? Make money easier to use, banks more willing to use it, and the ecosystem more active

On January 1 this year, the People's Bank of China implemented the new-generation digital RMB measurement framework, upgrading the digital RMB from cash-type 1.0 to deposit-money-type 2.0.

Why does the digital RMB infrastructure need upgrading? PBOC Deputy Governor Lu Lei laid out a clear path in his remarks.

In Lu Lei's view, when commercial bank customers hold digital RMB, it becomes a deposit-type legal digital currency, which removes commercial banks' concerns about potential "financial disintermediation" from digital cash and avoids a contraction of the money multiplier caused by funds sitting idle.

Lu Lei pointed out that upgrading the two-tier operating architecture is reflected in a layered arrangement — deposit money held by commercial banks on the retail side and central bank settlement money on the wholesale side — with both carrying central bank-issued digital coin strings, giving commercial banks more symmetrical rights, responsibilities and benefits, and strengthening coordination between the central bank and commercial banks.

"The digital RMB needs to deepen an account-based hybrid model," Lu Lei said. The digital RMB follows a development route based on a new-type account system while remaining compatible with the value model (blockchain payment and offline functions) — anchored on the account system while supporting on-chain and off-chain, online and offline smart payment needs.

To move the digital RMB smoothly from 1.0 to 2.0, its infrastructure must also be upgraded in step into a comprehensive central bank payment and settlement platform integrating issuance management, retail, wholesale, blockchain, cross-border, smart contracts and other services.

According to reports, this mainly comprises the central-bank-side digital RMB system (DCEPS) and the e-CNY Bridge (CBETS) comprehensive cross-border settlement service platform, built and operated by the Digital RMB Operations Management Center and the International Operations Center respectively.

Development results provide strong support for the upgrade. The digital RMB now has 30 operating institutions, achieving full coverage of systemically important banks. The central-bank-side DCEPS has 121 participants. After signing its first batch of 26 direct participants in June this year, CBETS has reached signing intentions with 42 more domestic and foreign banks.

Data show that by the end of September 2026, regions offering digital RMB services had recorded a cumulative 4.3 billion transactions worth about RMB 31 trillion. In September alone, transactions reached 99.67 million worth about RMB 1.87 trillion, up 12% and 123% year on year respectively.

The "heart" of the digital RMB infrastructure upgrades

The newly released central-bank-side digital RMB system (DCEPS) is akin to the "heart" of the digital RMB infrastructure.

Built and operated by the Digital RMB Operations Management Center under the PBOC Digital Currency Research Institute, the system is a core component of the digital RMB infrastructure — a comprehensive payment and settlement platform integrating issuance management, retail, wholesale, blockchain payment and smart contract services — and serves as the technical foundation for CBETS.

DCEPS adopts a unified base with modular and componentized design, supports one-point access for participating institutions without one-by-one system connections, runs 7×24 hours, securely and efficiently processes all types of payment services, and maintains fast-iterating system service capability.

The system provides eight core services — multi-institution cross-payment and settlement, unified liquidity management, issuance management, the smart contract ecosystem service framework, digital RMB digital assets, unified wallet management, unified data, and intelligent risk control — with five characteristics: intelligent operation, strong interoperability, low cost, high efficiency and fast iteration.

Specifically, "intelligent operation" means round-the-clock service covering retail and wholesale, on-chain and off-chain, with programmability safeguarding transaction performance; "strong interoperability" means payment instruments are interconnected at the base layer with unified standards, able to connect both blockchain systems and centralized systems and to build a global unified ledger of "central bank — participating institutions"; "low cost" means reusable modules, one-point access for institutions and unified liquidity management that saves resources and funding costs; "high efficiency" means fast business processing, reconciliation, dispute resolution and customer service; and "fast iteration" means services are modularly packaged with clear boundaries for agile development.

This system can make payments smarter, more intensive, more efficient and more agile — serving the central bank's mandate, supporting banks' digital transformation, and promoting financial inclusion and industrial connectivity. Zhou Tianhong, chief information officer of China Merchants Bank, also noted that the upgrade of infrastructure from 1.0 to 2.0 is not a simple generational replacement but a systematic upgrade of underlying capabilities; accordingly, CMB is achieving independent controllability and rapid iteration through a "head office — branch — integration" architecture.

Fitting the digital RMB with an "automatic executor"

This round of updates for the digital RMB is also reflected in ecosystem applications. The newly released digital RMB smart contract ecosystem service framework is oriented to the needs of the digital economy and builds a multi-party, open and collaborative smart contract service system.

According to reports, the framework upholds the core concepts of consistent standards, mandatory enforcement, openness and inclusiveness, rule-driven operation, and security and reliability. Implementing these concepts requires five core elements: public infrastructure, unified standards and specifications, a trusted operating environment, an open service ecosystem, and an ecosystem governance system.

Supporting smart contracts is one of the digital RMB's important features. With smart contracts, the use of digital RMB can carry embedded "rules" so that the use of funds complies with stipulations.

In prepaid consumption, for example, the digital RMB can carry a smart contract that restricts consumers' prepaid funds to spending at that store; unconsumed funds are automatically refunded if the merchant closes, guarding against the risk of merchants absconding with the money. In supply chain lending, funds can only be used to pay real orders and cannot be diverted elsewhere.

Staff of the Digital RMB Operations Management Center said the framework supports coordinated linkage and resource sharing among various innovators, allows financial institutions to flexibly combine services around customer needs, and promotes the wide application of the digital RMB across the economy and society, improving the quality and efficiency of financial services to the real economy.

The digital RMB smart contract ecosystem service framework has already landed in scenarios including prepaid funds management, supply chain finance, fiscal subsidies, consumption red packets and migrant worker wage payments, with more applications to come.

"From theoretical exploration to practical implementation, and from the domestic ecosystem to cross-border connectivity, a digital RMB ecosystem of cross-sector collaboration and complementary advantages is taking shape at a faster pace," the Operations Management Center said, adding that it will continue to consolidate the digital RMB infrastructure, deepen multi-party ecosystem collaboration, and steadily advance the application of the digital RMB, injecting new digital and intelligent momentum into high-quality development of the real economy.

(Source: Beijing News)