China’s Digital RMB: Interest-Bearing CBDC Redefines Payments and Cross-Border Settlement

China’s central bank digital currency now pays interest on wallet balances, turning the digital yuan into a deposit-like instrument with wide implications for banks, cross-border payments, and stablecoins.

Rich by Coin

2026-01-22

On January 1, 2026, the People’s Bank of China began paying interest on digital yuan balances held in user wallets.
To some, it might have seemed like a small technical upgrade that was long overdue.
Yet, it came with outsized implications: China has just made its central bank digital currency the first in the world to offer returns to ordinary holders.
As of the end of November 2025, the digital yuan has already processed over 3.48 billion transactions, totalling 16.7 trillion yuan ($2.38 trillion).

But that is just the baseline before the yield upgrade even took effect.
Now, with interest-bearing status, the digital yuan is no longer just a payment rail, but rather it is a place to park money – and adoption from here is likely to accelerate.
Throughout the history of digital assets, we have mostly heard consensus messaging around interest-bearing CBDCs: the European Central Bank said no, the Federal Reserve said no, the Bank for International Settlements said no.
Their position has been clear for many years – that CBDCs must function like digital cash, with no interest, and no exceptions.

But China saw the same risks and chose a different path, and a different future for the digital yuan.
Starting from January 1, digital yuan wallet balances now function as liabilities of commercial banks under PBOC oversight – and they pay interest – marking the first time any CBDC worldwide operates in such a way.
The new approach splits the CBDC playbook in half: with Western orthodoxy on one side, and Chinese pragmatism on the other.
Originally, the digital yuan was supposed to replace paper money, making the digital currency easier to use (through mobile apps like Alipay) than its physical version.