China is taking a major step to accelerate adoption of its digital currency by allowing commercial banks to pay interest on digital yuan (e-CNY) balances. The decision is part of a broader push to strengthen China’s financial system and advance the role of the digital yuan in everyday use.
The announcement was made by Lu Lei, Vice Governor of the People’s Bank of China, who confirmed that the policy will take effect on January 1. This initiative aligns with the Chinese Communist Party’s 15th Five-Year Plan, which calls for the steady expansion of the digital yuan.
In a recent article, Lu explained that the central bank plans to introduce incentives that position the digital yuan not only as a payment tool, but also as a savings option. Under the new rules, banks will calculate and pay interest on balances held in real-name digital RMB wallets, following existing guidelines on deposit interest rate pricing.
He also noted that banks will be allowed to manage digital yuan balances as part of their asset-liability operations, and that digital currency deposits will receive the same protections as traditional bank deposits.
Although the digital yuan has made progress, adoption has been slower than expected due to strong competition from existing payment platforms already favored by Chinese consumers. By offering interest, authorities hope to make the digital yuan more attractive and place it on equal footing with regular bank deposits.
That said, the impact may be limited. Deposit interest rates in China are currently very low reportedly around 0.05% — which means the financial incentive itself is modest.
Despite this, usage continues to grow. Since November 2025, the digital yuan has processed over 3.48 billion transactions, with a total transaction value nearing 17 trillion yuan.
