China Expands Digital Yuan Pilot to Free Trade Zones Nationwide
China Broadens Digital Yuan Testing Ground Beyond Shanghai
China is accelerating its digital currency ambitions by expanding its digital yuan initiative beyond Shanghai’s Free Trade Zone to a broader network of national free trade zones, the country’s central bank confirmed on Friday, July 4.
Ji Min, head of the People’s Bank of China (PBOC) Research Bureau, said the move marks a push to replicate the “Shanghai model” of digital finance innovation in other regions. The initiative is part of a wider strategy to open up the country's financial sector and modernize its digital infrastructure.
“China will deepen financial openness and innovation,” Ji stated, adding that free trade zones will continue to play a central role in advancing electronic payment systems and digital yuan adoption.
Digital Yuan Gains Ground in Strategic Economic Zones
Free trade zones (FTZs) in China are designated regions with relaxed trade and investment rules. With 21 zones scattered across key coastal provinces like Shanghai, Fujian, and Hunan, they’ve become ideal testing grounds for new financial technologies.
Dream Zhou
These zones already offer incentives for foreign businesses and streamlined regulatory processes. Now, they’ll be central to China’s next stage of digital currency experimentation. While there’s no confirmed date for a full nationwide rollout, the expansion into FTZs suggests a methodical, region-by-region approach to scaling the digital yuan.
Momentum Builds Behind China’s CBDC Pilot
Since the digital yuan pilot began in 2020, China has been testing the central bank digital currency (CBDC) in cities such as Shenzhen, Beijing, and Suzhou. By 2024, cumulative transactions using the digital yuan topped ¥7.3 trillion (roughly $1.02 trillion), with over 180 million individual wallets registered.
That level of traction places China far ahead of most other nations exploring state-backed digital currencies. Officials say expanding the pilot to more FTZs will help refine the technology and policy frameworks before any nationwide adoption.
A Measured Step Toward a Digital Financial Future
While the PBOC hasn't yet committed to a full national launch, the current expansion signals confidence in the pilot’s results so far. It also aligns with China’s broader digital economy goals, particularly in areas such as cross-border trade, fintech innovation, and international competitiveness.
At the recent Lujiazui Forum — a major financial summit held in Shanghai — regulators reiterated the importance of using FTZs to incubate and scale new models of financial openness, including digital currencies.