The People’s Bank of China has begun offering interest on its central bank digital currency, aiming to encourage use as an alternative to the dollar for cross-border transactions, according to NIKKEI ASIA.
This makes the digital yuan, or e-CNY, the world’s first interest-bearing CBDC, state-run China Central Television reports. The digital euro, due out from the European Central Bank as early as 2029, is not expected to pay interest.
The digital yuan is the product of a research organization set up in 2014 by the PBOC that focused on domestic retail use. Individuals and businesses can create digital wallets, then convert yuan to e-CNY.
Pilot testing with citizen participation began in the tech hub of Shenzhen in October 2020 and is ongoing. As of September 2025, pilots were proceeding in 26 regions. Users can pay with e-CNY by scanning bar codes at restaurants and other businesses.
A cumulative 19.5 trillion yuan ($2.8 trillion) in e-CNY transactions had been made by the end of 2025, Chinese media report. The number of digital wallets had grown to 230 million for individuals and 19 million for businesses.
Now, digital wallets for which the users’ names have been verified will receive interest on their digital currency balances. The rate is set at 0.05% a year, matching the benchmark for ordinary savings accounts at domestic commercial banks.
Transactions, balances and other information are managed using blockchain technologies.
With the SWIFT system, the current standard for cross-border payments, transactions can take anywhere from days to around a week to be processed through correspondent banks that act as intermediaries. The PBOC says that with the current system in testing, transaction times are cut to seconds and fees can be reduced by up to 50%.
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