Major New Year Upgrade for China’s Digital Yuan — e-CNY Wallets Can Now Earn Interest!

A major financial policy update in China officially took effect today: Digital yuan (e-CNY) wallets now earn interest on balances, similar to a traditional demand deposit. How significant is this? Simply put, money stored in an e-CNY wallet can now generate returns, just like funds in a bank savings account. Even more importantly, these “digital deposits” are covered by deposit insurance, with protection of up to RMB 500,000. What does this mean? This is far more than a minor upgrade. It marks a transformation of the digital yuan from a pure form of electronic cash into a true digital deposit currency, significantly enhancing its appeal. Analysts believe this move could encourage wider adoption and usage of the e-CNY, accelerate its circulation, and give China a stronger lead in the global race for central bank digital currencies (CBDCs).