China’s central bank will allow commercial banks to pay interest on digital yuan wallet balances starting 1 January 2026, marking a major shift in the role of the e-CNY.
The move positions the digital yuan as deposit-like money rather than a simple digital replacement for cash.
The policy was outlined by Lu Lei, a deputy governor of the People’s Bank of China, in a report published by China Financial News and republished by Sina Finance.
The new framework allows banks to integrate e-CNY balances into their asset and liability management systems.
The digital RMB will move from the digital cash era to the digital deposit currency era.
Lu Lei said.
It has the functions of monetary value scale, value storage, and cross-border payment.
Lu Lei stated.
The change represents one of the most significant upgrades to China’s central bank digital currency since pilot programmes began.
Cryptocurrency trading and stablecoins remain banned in mainland China despite the continued expansion of the digital yuan.
Chinese regulators view the e-CNY as a state-backed alternative that can leverage blockchain-style infrastructure under centralised control.
The development contrasts sharply with the policy direction in the United States.
US President Donald Trump signed an executive order in January banning the creation and use of a US central bank digital currency.
The order cited risks to financial stability, individual privacy, and national sovereignty.
The ban has been described as a turning point for the US crypto sector, particularly for private stablecoin issuers.
In July, Trump also signed the GENIUS Act, creating the first comprehensive federal framework for stablecoins.
The law introduced strict collateral requirements and mandatory compliance with anti-money laundering rules.
China’s latest move is part of its broader “Action Plan” to strengthen digital RMB management and supporting financial infrastructure.
The plan focuses on expanding nationwide usage of the e-CNY and improving technical systems for payments and settlement.
In September, the central bank launched the RMB International Operations Center in Shanghai.
The centre aims to develop onchain settlement tools and cross-chain transfer functions for cross-border payments.
Officials say these measures could improve efficiency and boost international use of the yuan.
Critics argue the system could significantly increase state oversight of financial activity.
The Chinese government wants more control over payments.
Alex Gladstein said.
Gladstein is chief strategy officer at the Human Rights Foundation.
He warned that a centrally controlled digital currency could give authorities deeper access to transaction data.
Gladstein said direct control over digital payments could increase the power to restrict financial access.
He previously shared these concerns in comments to MIT Technology Review.