Key Highlights
- China’s commercial banks will start paying interest on digital yuan wallets from January 1, 2026, to encourage wider public and business use.
- Digital yuan balances at banks will earn interest and get deposit insurance, making them similar to regular bank deposits.
- The system will run through banks under central bank rules, keeping the digital yuan inside China’s regulated financial system.
China’s commercial banks will begin paying interest on its official digital currency, the digital yuan, from January 1, 2026. This is part of the central bank’s effort to boost its central bank digital currency (CBDC) adoption after years of trials.
The move was outlined by Lu Lei, a deputy governor of the People’s Bank of China (PBOC), in an article published in the Financial News, a newspaper affiliated with the central bank.
Under the new policy, commercial banks offering digital yuan wallets will pay interest to users based on their wallet balances. Until now, the digital yuan has mainly functioned as a digital form of cash, which does not earn interest. Regulators believe the addition of interest will make holding the digital currency more attractive for households and businesses.
Digital Yuan to be treated like bank deposits
The change marks a shift in how the digital yuan, or the e-CNY, is classified. Digital yuan balances held at commercial banks will be treated more like bank deposits, earning interest and receiving protection under China’s deposit insurance system.
Lu said this design is intended to promote the use of the digital yuan without drawing funds out of the banking system or undermining financial stability.
The deputy governor noted that the digital yuan will continue to operate under a two-tier structure. The central bank sets the rules and technical standards while commercial banks manage wallets, process payments, and carry out compliance checks such as anti-money-laundering controls.
Lu wrote, “Banking institutions will pay interest on the balance of customers’ real-name digital RMB wallets, and these balances will be included in the deposit insurance system.”
A decade of testing efforts
China began researching the digital yuan in 2014 as the rapid expansion of digital payments and cryptocurrencies raised concerns about monetary control. Pilot programs began in 2016, using existing banks and payment systems instead of creating a new system outside the banking network.
As of November 2025, the number of transactions conducted using the digital yuan was 3.48 billion, with a value of 16.7 trillion yuan, as announced by the relevant authority. A cumulative number of 230 million personal wallets and 18.84 million enterprise wallets were opened. The cross-border tests accumulated 4,047 transactions worth 387.2 billion yuan.
Hybrid model and stronger oversight
Lu said that the digital yuan is a hybrid model, based on traditional account management while merging in features from selected blockchains, not on the decentralized technologies underpinning cryptocurrencies.
Blockchain will most probably be deployed within fields like cross-border payments, trade finance, and asset settlement, where the technology could make flows more efficient and transparent.
Regulators plan to boost oversight by separating management from operations and improving tech for real-time monitoring and risk control. Lu stressed the digital yuan will complement, not replace, cash and bank deposits.
“The steady development of the digital yuan prioritizes stability and continuously improves the risk prevention and control safety net,” the deputy governor added.
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