worldcoinindex.com
China’s central bank is preparing a major reset of its digital yuan strategy, signaling a shift in how the state-backed currency will function within the financial system. Beginning January 1, 2026, commercial banks will start paying interest on digital yuan balances, transforming the e-CNY from a cash-like instrument into what officials now describe as a form of digital deposit currency.
The update was outlined by Lu Lei, deputy governor of the People’s Bank of China (PBOC), in a commentary published by state-run Financial News. According to Lu, the redesign follows nearly a decade of pilots and testing, as authorities look to overcome sluggish user adoption despite the e-CNY’s reputation as one of the world’s most advanced central bank digital currencies.
Under the new framework, verified digital yuan wallets held at banks will accrue interest based on existing deposit pricing rules. Digital yuan balances will also receive the same protection as traditional bank deposits under China’s deposit insurance scheme, placing the CBDC on equal footing with conventional savings products.
The overhaul gives banks more flexibility to incorporate digital yuan holdings into their broader balance sheet management. For non-bank payment firms, digital yuan reserve funds will continue to be subject to a 100% reserve requirement, mirroring current rules for customer funds.
The scale of the project is already significant. As of the end of November 2025, China had processed 3.48 billion e-CNY transactions with a total value of 16.7 trillion yuan ($2.38 trillion). Even so, the digital yuan has struggled to compete with dominant private payment platforms like WeChat Pay and Alipay, which remain deeply embedded in daily commerce.
To reignite momentum, authorities have stepped up promotion in recent months. The PBOC has pledged to expand cross-border use of the digital yuan, including a planned pilot with Singapore, and is exploring CBDC payment links with Thailand, Hong Kong, the UAE, and Saudi Arabia. In September, China also opened an e-CNY International Operation Center in Shanghai, underscoring its ambition to extend the yuan’s global reach.
While China continues to champion blockchain-based infrastructure, the country maintains a strict ban on cryptocurrency trading and mining, drawing a clear line between state-controlled digital money and decentralized crypto assets.