PBoC reclassifies e-CNY as interest-bearing deposit in major overhaul
The digital yuan (e-CNY) just got a major upgrade.
On January 1, the central bank (PBoC) formally reclassified the e-CNY from a digital cash substitute into an interest-bearing deposit.
- PBoC Deputy Governor Lu Lei flagged the change – part of an action plan not yet made public – in a December 28 article in the PBoC’s in-house newspaper (Financial News).
Why the reclassification matters: Since its launch in 2019, the e-CNY has been treated as the digital equivalent of physical cash (i.e. “M0”) for accounting and usage purposes.
- That classification confined the e-CNY largely to retail payments – an area already dominated by ubiquitous mobile payment platforms like WeChat Pay and Alipay.
- As a result, uptake has been poor, despite repeated policy pushes.
Under the new framework, e-CNY balances will accrue interest, a shift Lu says will spur broader adoption.
There’s more: Commercial banks and other financial institutions can now hold e-CNY as a liability – provided they meet existing reserve requirements – and use it for credit creation and balance-sheet management.
- That will create new financial incentives for financial firms to promote the digital currency.
Get smart: This is the most consequential policy move yet to revive the e-CNY after years of underwhelming results.
- With incentives finally aligned, 2026 is likely to be the first year the e-CNY gains meaningful traction.
Get smarter: Beijing is determined to advance a centralized digital currency on its own terms – rather than following the crypto- or stablecoin-led paths taking shape in the West.