Digital Yuan holdings to earn interest under China's new framework
China's new digital yuan framework, starting January 1, will allow commercial banks to pay interest on e-CNY holdings.Summary
The People's Bank of China (PBOC) is launching a new digital yuan framework on January 1, which will enable commercial banks to pay interest on clients' holdings of the central bank digital currency (e-CNY). According to PBOC Deputy Governor Lu Lei, this shift aims to incentivize broader adoption by transforming the e-CNY from digital cash into digital deposit money. Lei described the future digital yuan as a modern payment means circulating within the financial system, possessing attributes of commercial bank liabilities, and functioning as a measure of monetary value, store of value, and for cross-border payments. The plan also includes establishing an international digital yuan operations center in Shanghai. The PBOC initially started research on the CBDC in 2014 and officially launched the digital yuan in April 2022.
(Source：CoinDesk)