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.
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.
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