China's digital yuan is set to become the world's first interest-bearing central bank digital currency, according to state broadcaster CCTV. Starting January 1, e-CNY stored in wallets will earn interest based on demand deposit rates, marking a significant shift from 'digital cash' to 'digital deposits'. This move aims to boost users' adoption of the digital yuan, expand its usage scenarios, and solidify China's global leadership in central bank digital currencies. However, the digital yuan's use is currently restricted to government agencies and state companies, with most transactions still conducted through popular platforms like Alipay and WeChat Pay. The People's Bank of China (PBOC) has also taken a firm stance against cryptocurrencies, vowing to crack down on illegal activities involving stablecoins. Despite these restrictions, the PBOC is actively promoting the use of its digital currency, establishing a global operation center in Shanghai to facilitate international adoption and supporting more commercial banks to operate e-CNY businesses. This development comes as the PBOC prepares to release an action plan on digital yuan management, introducing a new framework for measurement, management, operation, and ecosystem.
