China, the world’s second-largest economy, is preparing to give its digital currency a stronger push. Starting January 1, 2026, banks in China will be allowed to pay interest on digital yuan balances held in verified wallets.
This move came to strengthen the digital yuan wallets option compared to popular private payment apps like Alipay and WeChat Pay.
The People’s Bank of China (PBOC) has released a detailed action plan to strengthen the structure, rules, & financial infrastructure behind the digital yuan. For this, they have introduced a fully upgraded management and operational system for their central bank digital currency.
According to the PBoC, digital yuan balances will be treated under existing deposit rules. This means they will also fall under China’s deposit insurance system, giving users more confidence in holding e-CNY.
Deputy Governor Lu Lei explained that China’s digital yuan, known as the e-CNY, is designed to work as money people can value, save, and use for payments both inside China and across borders.
He added that the central bank will continue to provide technical support and strict oversight.
Until now, the digital yuan has worked mostly as a payment tool. With interest payments coming in, it will start to feel more like a regular bank deposit. This change comes at a time when traditional bank savings offer low interest rates.
By adding interest to digital yuan wallets, officials aim to make the e-CNY a more attractive option compared to popular private payment apps like Alipay and WeChat Pay.
Chinese authorities hope this shift will encourage people to use the digital yuan more often in daily life.
The digital yuan has already seen large usage numbers. By late November 2025, it had processed over 3.4 billion transactions worth nearly 16.7 trillion yuan. Even so, it still struggles to compete with established payment platforms that dominate everyday spending in China.
As 2026 approaches, the digital yuan is moving from an experiment toward becoming a core part of China’s financial future.
Unlike private apps, the digital yuan is issued by the central bank, carries deposit protection, and will earn interest, adding safety and savings value.
Low bank savings rates and strong competition from private apps pushed regulators to make the digital yuan more attractive for everyday use and holding value.
China plans for the e-CNY to support cross-border payments over time, though international usage will depend on regulations and partnerships.
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