China has announced an expansion of cross-border settlement trials using the digital yuan, extending pilot programs with multiple Southeast Asian economies. Revealed on December 28, 2025, the initiative allows selected banks, logistics firms, and multinational corporations to conduct real-time trade settlements using China’s central bank digital currency, reducing reliance on traditional correspondent banking systems.
The expanded trials target high-volume trade sectors such as electronics, energy equipment, agricultural commodities, and manufacturing inputs. Participants have reported faster settlement times, lower transaction costs, and improved transparency compared to conventional cross-border payment channels. Authorities emphasized that the digital yuan remains complementary to existing financial infrastructure and that participation in the program is voluntary.
From a strategic perspective, the initiative reflects China’s gradual approach to internationalizing the digital yuan while mitigating exposure to external financial risks. By embedding the currency within trade flows rather than speculative capital movements, policymakers aim to build practical usage and trust over time.
Analysts view the expansion as a foundational step toward reshaping regional trade finance infrastructure, particularly in fast-growing Southeast Asian markets. While the trials remain limited in scale, they signal China’s long-term intent to influence the evolution of cross-border payment systems in an increasingly digital global economy.
