From Digital Cash to Regulated Deposit: China’s Interest-Bearing e-CNY

In this paper, we discuss:

• China’s decision to begin paying interest on e-CNY holdings from 2026 to encourage broader adoption and everyday use;
• The integration of e-CNY into the two-tier banking system, with wallet balances treated as commercial bank deposit liabilities;
• The alignment of e-CNY rates with standard demand deposits to reduce risks of bank disintermediation;
• The repositioning of the digital yuan as regulated payment infrastructure, including for cross-border settlement, rather than a bank-free monetary alternative.

Download PDF: e-CNY – February 2026