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China to Let Banks Pay Interest on Digital Yuan From Jan. 1, 2026

The shift reclassifies e‑CNY balances as insured bank liabilities to spur uptake through tighter integration with the financial system.

Overview

  • A PBOC Action Plan effective Jan. 1 authorizes interest payments on verified e‑CNY wallets, shifting the digital yuan from cash-like tokens to deposit money.
  • Banks must include wallet balances in reserve calculations and may manage them within asset‑liability operations, while non‑bank payment firms face a 100% reserve requirement.
  • Digital yuan balances will be covered by China’s deposit insurance, aligning protections with traditional deposits.
  • Authorities are setting up an international e‑CNY operations centre in Shanghai and preparing expanded cross‑border pilots with partners including Singapore, Thailand, Hong Kong, the UAE and Saudi Arabia.
  • Official data through November 2025 show 3.48 billion e‑CNY transactions totaling 16.7 trillion yuan, with the revamp aimed at wider adoption against entrenched rivals such as WeChat Pay and Alipay.