China boosts CBDC adoption as tariff war weighs on yuan

As the trade war between the United States and China escalates, the People's Republic is reviving its efforts to promote the use of the digital yuan. Rather than a sign of progress, the renewed push reflects mounting pressure from Washington's sweeping tariffs. While Chinese officials continue to stress their preference for peaceful coexistence, escalating tensions have forced a strategic pivot. In this environment, the yuan has fallen to multi-year lows against the US dollar, underscoring the strain on China's currency and economy.

In an effort to stabilize its national currency, including the digital version, the People's Bank of China has responded with monetary interventions. The central bank also ramped up positive messaging in the state media about the adoption of the e-CNY.

As of March 11, 2025, the number of unique digital yuan wallets had more than quadrupled from 180 million to 800 million, according to PBOC data. The cumulative transaction volume increased by 45%, climbing from 7 trillion to 10.2 trillion e-CNY. Notably, most wallets in mainland China are linked to citizens' digital ID cards.

In addition to the rapid growth in usage, the PBOC is also expanding the functionality of its central bank digital currency. Recent upgrades include QR code scanning and the ability to make offline payments, part of China's broader push to digitize its economy amid geopolitical headwinds.