China will pay interest on digital yuan wallets from January 2026

Digital yuan moves to deposit model

China’s central bank, the People’s Bank of China, will turn the digital yuan into interest-bearing deposit money from January 1, 2026. The digital yuan, also called e-CNY, is China’s central bank digital currency (CBDC), a state-issued digital form of the renminbi. Under the new framework, commercial banks treat real-name digital yuan wallet balances as deposit liabilities. These balances sit on bank balance sheets and form part of banks’ asset-liability management.

Interest, insurance and reserve rules

Commercial banks pay interest on eligible digital yuan wallets according to standard deposit rate regulations. Wallet balances receive protection from China’s deposit insurance system, in the same way as ordinary bank deposits. The central bank includes e-CNY wallet balances in its reserve requirement framework. Authorized banks count digital yuan liabilities in the base used to calculate required reserves, while non-bank payment institutions maintain full reserve backing for the digital yuan they manage under the new framework.

This makes China the first economy to position its CBDC as an interest-bearing currency — that is, a deposit money — strengthening China's leading role in CBDC development and digital financial innovation. — Liu Xiaochun, Vice-President, Shanghai Finance Institute

Transaction scale and adoption figures

By the end of November 2025, digital yuan usage reached 3.48 billion cumulative transactions. Total transaction value stood at 16.7 trillion yuan, equal to about 2.37 trillion United States dollars. These figures cover activity since large-scale pilots started in 2019, including retail payments, public services, transport, and cross-border trials. The new interest and deposit features apply on top of this existing transaction base.

Shift from cash model to account model

The framework moves e-CNY from a cash-like M0 classification to M1 deposit money, which combines cash with demand deposits. Under the new model, e-CNY functions as an account-based payment instrument issued as a liability of commercial banks. The central bank keeps control of technical standards and core infrastructure, while banks create wallets, run security systems, and manage compliance. This structure integrates digital yuan balances into China’s banking system rather than keeping them separate as digital cash only.