# China's Central Bank Sets Collateral Rules for Bond Backstop

> People's Bank of China requires high-grade collateral for liquidity backstop to prevent market stress cycles.
- Title: China's Central Bank Sets Collateral Rules for Bond Backstop
- Summary: People's Bank of China requires high-grade collateral for liquidity backstop to prevent market stress cycles. China's central bank plans to mandate…
- Keywords: central bank, liquidity backstop, bond sales, market stress, collateral rules, people's bank of china, pbo, crypto, finance, China's, Central, Bank
- Source: TokenPost — https://tokenpost.com/news/regulation/36980
- Published: 2026-10-21T19:46:51+00:00
- Read time: 1 min
- Topics: central bank, liquidity backstop, bond sales, market stress, collateral rules, people's bank of china, pbo, crypto, finance
## Central Bank Plan
The People's Bank of China plans to require high-grade collateral for a liquidity backstop to break fund withdrawals and bond sales cycles during market stress.

> We try to strike a fine balance between forestalling systemic financial risks and preventing moral hazard in financial markets
## Facility Details
The facility targets asset managers facing liquidity pressure and redemptions driving bond sales, with bank wealth management subsidiaries and public fund managers eligible.
## Digital Yuan Expansion
The PBOC increased digital yuan operators to 30 institutions, covering all systemically important banks, after changing its statistical classification to deposit money in 2026.
## Key takeaway

China's central bank plans to mandate high-grade collateral for a liquidity facility to stop fund withdrawals and bond sales during market stress.