China’s Digital Yuan Framework Enables Interest Payments on Wallets Starting January 2026

TLDR: 

• Commercial banks will pay interest on digital yuan wallets starting January 1, 2026 under new framework.
• The digital yuan processed 3.48 billion transactions totaling 16.7 trillion yuan through November 2025.
• Banking institutions must include digital yuan wallet balances in their deposit reserve base calculation.
• The framework transitions digital yuan from version 1.0 cash-based to version 2.0 deposit-based currency. 

China’s central bank will implement a new digital yuan framework on January 1, 2026. The framework allows commercial banks to pay interest on e-CNY wallet balances. 

Lu Lei, deputy governor of the People’s Bank of China, announced the transition in an article published Monday. 

The move transforms the central bank digital currency from a cash substitute to a deposit-based currency. Officials describe the shift as moving from digital cash to digital deposit money era.

Framework Transforms Digital Yuan Into Deposit-Based Currency

The People’s Bank of China released an Action Plan that restructures digital yuan operations. Commercial banks will treat digital yuan as part of their asset-liability operations under the new system. 

Lu Lei stated the currency will transition to an era with “functions of monetary value scale, value storage, and cross-border payment.” 

Banking institutions must calculate and pay interest on customers’ real-name digital RMB wallets. The interest rates will comply with the self-discipline agreement on deposit interest rate pricing.

The framework incorporates digital yuan into the reserve system management structure. Banking digital yuan business operators must include wallet balances in their deposit reserve base. 

Non-bank payment institutions participating in digital yuan operations must implement 100% deposit requirements. This arrangement marks the transition from cash-based version 1.0 to deposit-based digital yuan version 2.0.

The central bank maintains a two-tier operation system with clear responsibilities. The People’s Bank of China handles business rules, technical standards, and infrastructure planning at the top level. 

Commercial banks open digital RMB wallets, provide circulation payment services, and assume compliance responsibilities at the operational level. The system includes deposit insurance protection equivalent to traditional bank deposits.

The framework addresses financial disintermediation risks while preserving banking system stability. Digital yuan wallet balances calculate into corresponding currency levels according to liquidity standards. 

Banks can independently conduct asset-liability management of digital RMB wallet balances. The arrangement creates compatible incentives between cash payment advantages and bank account income benefits.

Adoption Statistics Show Extensive Market Penetration

The digital yuan processed 3.48 billion transactions through November 2025. Total cumulative transaction value reached 16.7 trillion yuan during the pilot period. 

Users opened 230 million personal wallets through the digital yuan application. Business entities established 18.84 million digital yuan unit wallets across various sectors.

The currency supports applications across wholesale, retail, catering, cultural tourism, education, and medical sectors. 

Public services, social governance, rural revitalization, and cross-border settlement utilize the platform. The multilateral central bank digital currency bridge processed 4,047 cross-border payment transactions. 

These transactions totaled approximately 387.2 billion yuan, with digital yuan comprising 95.3% of transaction volume.

The system combines account models with blockchain technology for different use cases. Commercial banks utilize accounts for standardized retail and wholesale transactions at lower costs. 

Blockchain applications enhance trust in specific scenarios requiring collaborative transactions and transparency. Smart contracts enable programmable features for supply chain finance, carbon credit systems, and prepaid fund management.

The Digital Currency Research Institute established management committees to coordinate oversight and self-regulation. 

Operating centers handle domestic and international system operations separately. Regulatory technology using artificial intelligence and big data supports risk identification and monitoring.  The infrastructure maintains independent, controllable, and secure technical standards for financial stability.

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