Catenaa, Wednesday, December 31, 2025-China will allow commercial banks to pay interest on digital yuan holdings starting in 2026, marking a policy shift to boost adoption of its central bank digital currency, officials said Monday.
The People’s Bank of China said the digital yuan, known as the e-CNY, will move from a digital cash model to a digital deposit currency framework effective January 1, 2026.
The change follows more than a decade of trials and pilot programs aimed at expanding usage nationwide.
Under the new rules, banks may pay interest on verified digital yuan wallets in line with existing self-regulatory deposit pricing agreements.
Digital yuan balances will also receive the same protection as traditional bank deposits under China’s deposit insurance system, according to the central bank.
The framework gives banks more room to manage digital yuan balances within their asset and liability operations. For nonbank payment institutions, digital yuan reserve funds will be treated the same as customer reserve requirements, with a full reserve ratio applied.
China has run pilots of the e-CNY since 2019 and is widely viewed as a global leader in central bank digital currency development.
Adoption, however, has lagged as consumers continue to favor dominant mobile payment platforms such as WeChat Pay and Alipay.
Central bank data show that as of late November 2025, China had processed 3.48 billion digital yuan transactions totaling 16.7 trillion yuan, or about $2.38 trillion.
The policy update comes as authorities increase efforts to expand usage. The central bank has pledged to promote cross-border digital yuan payments, including pilots with Singapore and links to markets such as Thailand, Hong Kong, the United Arab Emirates and Saudi Arabia. An international operations center for the e-CNY opened in Shanghai earlier this year.
China continues to support blockchain development while maintaining a ban on cryptocurrency trading and mining.
