China’s Digital Yuan Makes History: First Cross-Border Retail Payment Executed in Laos

Digital yuan just crossed a real border—for real purchases.

The Brick-and-Mortar Breakthrough

Forget theoretical pilots. This wasn't a test between central banks. A consumer in Laos used China's central bank digital currency (CBDC) to buy actual goods from a Chinese merchant. The transaction sliced through traditional correspondent banking networks, proving the digital yuan can operate as a functional payment rail outside China's jurisdiction.

Bypassing the Old Guard

The move directly challenges the SWIFT-dominated cross-border payment system. It demonstrates a working model for settling international retail transactions without touching the US dollar or relying on Western financial intermediaries. Speed and cost? The specifics are state-controlled, but the architecture promises both.

The Geopolitical Footprint

Laos isn't a random choice. It's a key Belt and Road partner. This successful transaction plants the digital yuan's flag in Southeast Asia, offering a potential template for trade settlement within China's economic sphere of influence. It's financial infrastructure as soft power.

What This Cuts Through

It cuts through currency conversion fees. It cuts through multi-day settlement waits. It potentially cuts through US sanctions enforcement mechanisms by establishing a parallel, digitized payment channel. For Laos, it's a tighter link to the yuan bloc. For China, it's a strategic win.

The cynical finance jab? Wall Street banks spend billions on "blockchain initiatives" that mostly just repackage old fees. Meanwhile, a central bank just deployed a functional digital currency across sovereign borders to settle a real transaction—probably for the cost of running a server. Talk about disruptive innovation.

This Laos payment is a prototype. The model is now proven. Watch for replication. The race for CBDC relevance just entered a new, tangible phase.

Has the digital yuan debuted internationally? 

In late December 2025, through the joint efforts of the People’s Bank of China and the Bank of Laos, the Bank of China’s Vientiane branch connected to the PBOC’s cross-border digital payment platform and processed merchant QR payments in Laos. 

The system works through QR code scanning technology. Chinese tourists can make payments in Laos without exchanging foreign currency by opening the digital RMB app and scanning the merchant’s QR code to pay directly in local currency at the real-time exchange rate. The merchants do not need to change their existing payment equipment for this to work. 

The digital yuan has been tested domestically since 2019, but this Laos pilot is its first international retail deployment.

Starting January 1, 2026, banks will be permitted to pay interest on customers’ digital yuan deposits under the new regulatory framework. Lu Lei, a deputy governor of the People’s Bank of China, said that the system will transform the digital yuan’s role from digital cash to digital deposit money.

The digital yuan will also now receive the same protections as conventional bank deposits through the national deposit insurance system. 

By November 2025, the digital yuan had processed 3.48 billion transactions with a total value of 16.7 trillion yuan (approximately $2.38 trillion). The system currently supports 230 million personal wallets and 18.84 million corporate wallets. 

However, adoption has been slow compared to established payment platforms in China like WeChat Pay and Alipay. 

What is China’s strategy for its digital currency?

China operates a multilateral central bank digital currency bridge, known as mBridge. The platform processed 4,047 cross-border transactions worth 387.2 billion yuan ($54.2 billion), and digital yuan transactions accounted for approximately 95.3% of total mBridge activity. 

The mBridge system includes China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia. The project uses distributed ledger technology to enable real-time payments between countries without traditional banking intermediaries.

In October 2024, the Bank for International Settlements withdrew from the mBridge project due to concerns that the platform might help people avoid sanctions and harm the dollar’s global role. The participating countries continued developing the system without BIS involvement.

The People’s Bank of China released a comprehensive action plan in late December 2025 that covers the 2026-2030 period. The plan includes the PBOC establishing a Digital RMB Management Committee and operating dual centers for domestic and cross-border systems. It will also work to emphasize security, continuity, and coordinated oversight as priorities.

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