Digital Yuan Revolution: Whale Pilots Will Earn Interests in the New PBOC Regime

BankruptWorker · 2026-01-19T14:50:02+00:00

The People's Bank of China will transform the e-CNY from virtual cash to a bank-based currency on January 1st, allowing interest on deposits. This shift aims to enhance market usage and establish Shanghai as a global digital yuan hub, reflecting a decade-long digitalization effort.

BankruptWorker

2026-01-19 14:50:02

Abstract generation in progress

The Structural Change of e-CNY

Starting from January 1st, the People’s Bank of China will introduce a new framework that will radically transform the nature of the digital yuan. It will no longer be simply virtual cash but will evolve into a form of bank money based on deposit accounts. This transition represents a decisive turning point in China’s monetary strategy.

According to Lu Lei, Vice Governor of the PBOC, the new setup will allow commercial banking institutions to remunerate e-CNY holdings through interest. This mechanism aims to incentivize market operators, including large currency accumulators (the so-called “pilot whales”), to increase the use of the system.

What Will Change Specifically

The transformation involves several technical innovations. The future digital yuan will function as a modern payment instrument and financial circulation, supported by the technological infrastructure of the central bank. The new model will be characterized by:

Accounting nature: based on accounts distributed across banks, rather than just anonymous virtual cash
Technological compatibility: integration with DLT (Distributed Ledger Technology) systems
Extended monetary functions: ability to serve as a unit of account, store of value, and international payment channel

The Global Ambition: Shanghai as an International Hub

The plan is not limited to domestic borders. The PBOC intends to establish an international operational center in Shanghai dedicated to digital yuan transactions. This move represents a conscious effort to consolidate the Chinese currency’s position in global markets and facilitate cross-border exchanges.

A Decade-Long Path Toward Digitalization

The digital yuan program is not an abrupt novelty. The central bank has been researching since 2014 under the name Digital Currency Electronic Payment (DCEP), systematically exploring the theoretical and practical advantages of a digital currency issued by the central bank. The actual launch took place in April 2022, followed by a pilot phase with distribution via airdrop to test mass adoption.

AIRDROP3,1%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.