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.”
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.
This is in contrast to the stablecoin-friendly US regime, where President Donald Trump issued an executive order banning the creation of a CBDC, citing concerns over their potential to threaten financial system stability, individual privacy and national sovereignty.
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.
China’s “Action Plan” to accelerate e-CNY adoption
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.
In September, the central bank established the RMB International Operations Center in Shanghai, a blockchain services platform seeking to build onchain settlement tools and crosschain transfer capabilities to promote the use of the digital yuan in cross-border settlement.
While the PBOC said that the digital yuan could create more financial inclusion, some critics are concerned about its ability to give more financial control to the central bank.
“The Chinese government wants more control over payments,” according to Alex Gladstein, chief strategy officer at non-profit organization the Human Rights Foundation.
While the central bank already holds a “firm grip” on the two leading commercial payment giants, direct control and oversight over a digital currency would provide more data and “power to deny people access,” Gladstein told MIT Technology Review in August 2023.
Source: https://cointelegraph.com/news/china-digital-yuan-interest-wallets-2026
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.