China’s central bank has announced that commercial banks will begin paying interest on digital yuan wallets, starting January 1, 2026. The move marks a significant update of the digital yuan framework and signals a push from China to promote its central bank digital currency (CBDC) in the face of slow uptake and a strong year globally for stablecoins.
In an article recently published by state news outlet Financial News, Lu Lei, deputy governor of the People’s Bank of China (PBOC), wrote that “in response to real-world challenges,” the digital yuan, also known as e-CNY, “will transition from the era of digital cash to the era of digital deposit money.”
According to Lu, “The future digital yuan will be a modern digital payment and circulation means issued and circulated within the financial system, with technical support and supervision provided by the central bank, possessing the attributes of commercial bank liabilities, based on accounts, compatible with distributed ledger technology, and having the functions of a measure of monetary value, store of value, and cross-border payment.”
The e-CNY is one of the most advanced and widespread CBDCs in the world. As of November, the government had processed more than 3.4 billion transactions worth nearly 16.7 trillion yuan ($2.38 trillion).
Yet, despite the government introducing various measures to support its rollout, since the official pilot began in 2019, adoption has remained a challenge. This can be seen when compared to WeChat Pay, one of the two leading Chinese payment platforms alongside AliPay, which processed $15.4 trillion in transactions in 2024.
The relatively slow uptake of China’s CBDC also stands in contrast to a global boom in the stablecoin space. Based on recent research by blockchain intelligence firm TRM Labs, stablecoin transaction volume reached record highs in 2025. By August of 2025, stablecoins had reached their highest-ever annual transaction volume, rising 83% between July 2024 and July 2025 and reaching over $4 trillion in transaction volume between January 2025 and July 2025.
Cryptocurrency transactions and stablecoins are currently banned in Mainland China and thus do not pose domestic competition for the e-CNY, however, the thriving international stablecoin space—in contrast to the slow uptake of the digital yuan—has led the China to seek ways to boost the global influence of its CBDC. To this end, in September, the PBoC launched its e-CNY International Operation Center in Shanghai, which introduced the e-CNY Cross-Border Digital Payment Platform – in the hopes of boosting the digital yuan’s global reach.
China’s backing of its CBDC and commitment to its domestic ban on other digital assets also places the country’s approach in stark contrast to that of major international peers (and rivals), particularly the United States.
Since U.S. President Donald Trump took office for a second time in January, the country has doubled down on its support of the stablecoin space. One of Trump’s first acts as President was to sign an executive order banning CBDCs in the U.S., citing—arguably misguided—fears of it being misused as a tool of state surveillance and oppression, pointing to China’s digital yuan as an example.
In his article published December 28, the PBoC deputy governor did not specifically reference the U.S. or stablecoins as a motivating factor for the shift in the digital yuan framework, instead emphasizing that the change follows a decade of pilot programs and experimentation.
Watch: Finding ways to use CBDC outside of digital currencies
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Source: https://coingeek.com/china-shifts-digital-yuan-policy-to-add-wallet-interest/
