China Expands Digital Yuan Role With Interest-Bearing Wallets
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China’s Central Bank, the People’s Bank of China, announced recently that it plans to roll out a new framework for the digital yuan that will allow commercial banks to pay interest on e-CNY wallet balances, according to a recent Reuters report.
The plan is to allow digital yuan holders to start earning interest from January 1, 2026. Officials have said that the move will push the central bank digital currency beyond its original role as a cash substitute.
Reuters said that, starting January 1, e-CNY stored in wallets will earn interest based on demand deposit rates, becoming the world’s first interest-bearing CBDC. The new framework will let banks treat the digital yuan as part of their asset-liability operations, according to the PBoC’s deputy governor, Lu Lei.
The state broadcaster, the CCTV, commented on the move, saying that this means e-CNY will advance into an era of “digital deposits,” moving away from being simple “digital cash.” The state broadcaster also added that this will help increase users’ willingness to adopt the digital yuan, expand its usage scenarios, and further solidify China’s leading position in the global exploration of CBDCs.
Lei commented further by confirming that digital RMB will move from the digital cash era to the digital deposit currency era, adding that it has the functions of monetary value scale, value storage, and cross-border payment.
The US Takes The Opposite Approach
While other cryptocurrencies and crypto transactions are banned in Mainland China – including stablecoins – the PBoC continues to work on its native CBDC, seeking to use the efficiency of blockchain rails through a central bank-issued digital cash alternative.
The move comes in a rather sharp contrast to the current US stance, which has become quite stablecoin-friendly under the Trump Administration. US President Donald Trump even issued an executive order banning the creation of a CBDC in the country, stating that doing so has the potential to threaten financial system stability, individual privacy, and national sovereignty.
The executive order was signed soon after Trump’s inauguration, on January 23 of this year. It prohibited the establishment, issuance, circulation, or use of CBDCs. This development was described as a “game-changer” for the growth of the US crypto industry.
Trump also signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in July 2025, which became the country’s first stablecoin framework. It established the rules for stablecoin collateralization and mandated compliance with the country’s AML laws.
