Digital yuan shifts to interest-bearing deposits from Jan. 1, 2026

Source: Cryptonews Original Title: Digital yuan shifts to interest-bearing deposits from Jan. 1, 2026 Original Link: China’s central bank announced plans to transform the digital yuan into an interest-bearing deposit currency beginning January 1, 2026.

Key Changes

Banks will be permitted to pay interest on customers’ digital yuan deposits under the new regulatory framework. The digital yuan will transition from its current function as electronic cash to become a “digital deposit currency.”

The evolution follows a decade of pilot programs and field testing. Beijing has encountered challenges in driving widespread adoption of the payment instrument among citizens, despite official testing having commenced in 2019.

New Framework Details

Under the new framework, banks will be authorized to remunerate verified digital wallets according to existing self-regulatory agreements used for setting interest rates on traditional deposits. Digital yuan balances will receive the same protections as conventional bank deposits through the national deposit insurance system.

The reform provides banks with greater operational flexibility to manage digital currency balances within their asset-liability management activities. Non-bank payment firms will be required to maintain mandatory reserves held in digital yuan at a 100% reserve ratio.

Cross-Border Expansion

The central bank stated its intention to expand cross-border use of the digital yuan. Pilot projects are planned with Singapore, along with initiatives to promote central bank digital currency payments with trading partners including Thailand, Hong Kong, the United Arab Emirates, and Saudi Arabia.

As of November 2025, the e-CNY recorded 3.48 billion transactions processed. In September, the central bank opened the International Operations Center for the e-CNY in Shanghai, an initiative designed to increase the global influence of China’s currency within international financial networks.