China To Let Banks Pay Interest On Digital Yuan Wallets From...

China’s central bank will let banks pay interest on digital yuan wallets from Jan. 1, 2026, reshaping e-CNY as deposit-like money as the US bans CBDCs.

China’s central bank is rolling out a new framework for the digital yuan that will allow commercial banks to pay interest on e-CNY wallet balances starting Jan. 1, 2026, a move officials say will push the central bank digital currency (CBDC) beyond its original role as a cash substitute.

The new CBDC framework will allow banks to treat the digital yuan as part of their asset-liability operations, Lu Lei, a deputy governor of the People’s Bank of China, wrote in a PBOC-affiliated China Financial Times article published on Monday.

“The digital RMB will move from the digital cash era to the digital deposit currency (Digital Deposit Money) era,” said Lei in the report. “It has the functions of monetary value scale, value storage, and cross-border payment.”

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While cryptocurrency transactions and stablecoins are banned in Mainland China, the PBOC continues developing its CBDC framework, seeking to utilize the efficiency of blockchain rails through a central-bank-issued digital cash alternative.

The executive order, signed on Jan. 23, prohibits the establishment, issuance, circulation or use of CBDCs, a development described as a “game-changer” for the growth of the US crypto industry, Anndy Lian, an author and intergovernmental blockchain adviser, previously told Cointelegraph.

In July, Trump signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, the US’s first comprehensive stablecoin framework, which established clear rules for stablecoin collateralization and mandated compliance with Anti-Money Laundering laws.

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China’s new framework, the “Action Plan on Further Strengthening the Digital RMB Management Service System and Related Financial Infrastructure Construction,” seeks to expand the national use of the e-CNY and build the necessary infrastructure.

Source: CoinTelegraph