China to Launch Digital Yuan Action Plan in 2026, Introduces Interest on CBDC Holdings

China’s central bank, the People’s Bank of China (PBOC), has launched a major digital currency action plan, effective January 1, 2026, marking a significant step in the evolution of the country’s central bank digital currency (CBDC) strategy.

Under the new framework, the digital yuan (eCNY) will shift from a simple digital cash substitute to a fully integrated digital deposit currency, allowing commercial banks to treat wallet balances as part of standard banking operations. In a first among major CBDCs, the digital yuan will accrue interest, making digital wallet holdings comparable to traditional bank deposits.

The plan also introduces deposit insurance coverage for eCNY balances and ensures that these holdings count toward banks’ reserve requirements, embedding the digital currency more deeply into China’s financial system. The action plan formalizes management systems, operational mechanisms, and risk controls developed during years of pilot programs across retail payments, public services, and crossborder transactions.

Officials say the initiative aims to boost adoption, integrate the CBDC with mainstream banking, and support financial innovation, including international use of the yuan. Analysts note that China’s move positions the digital yuan as one of the first major interest-bearing CBDCs, signaling a milestone in global digital currency development.

The PBOC emphasized that the action plan is part of China’s broader strategy to modernize its financial infrastructure and strengthen the yuan’s role in both domestic and international markets.