Yes, and all software had to be rewritten to use UTF-8. If you tried sending UTF-8 bits through an ASCII-only system, you'd display a bunch of garbage and even cause larger issues (as some bit sequences could have been interpreted as control/escape characters).

So, just like expanding address space (IP: 32-bit to 128-bit; ASCII: 8-bit/1-byte to multi-byte), you had to rewrite all the software to handle things.