Interest Calculation and Deposit Transformation of Digital Renminbi

The People's Bank of China recently released the "Action Plan," which clarifies that starting from January 1, 2026, the new generation of digital renminbi measurement framework, management service system, operational mechanism, and ecological system will officially launch. The most significant change is that the balance in digital renminbi wallets can earn interest from commercial banks, elevating the original positioning of "digital cash" to "digital deposit currency." Under this framework, digital renminbi is given a clearer liability attribute of commercial banks. Deputy Governor of the Central Bank, Lu Lei, directly defined it as "future digital renminbi with the liability attribute of commercial banks," indicating that its functions in value measurement, value storage, and cross-border payments will be closer to traditional deposits. According to public data, digital renminbi has processed approximately 3.48 billion transactions, amounting to about 16.7 trillion yuan, forming a considerable payment network even in the non-interest-bearing phase. After the announcement, A-share digital currency concept stocks quickly surged in the afternoon, with Lakala rising over 10%, Sifang Jingchuang up over 5%, and stocks like Cuiwei Co., Chutianlong, and New Guodu following suit. The funding side has completed a round of pricing for the expectations of "interest-bearing + deposit transformation," with community sentiment overall being optimistic, slightly tinged with FOMO, but the discussion volume is relatively limited, and has not formed a nationwide public opinion wave.

Real Changes in Interest Mechanism and Reserve Adjustments

Under the new framework, the logic of interest calculation on digital renminbi wallet balances is that commercial banks, as operating institutions, will pay interest on the digital renminbi held by users. The pricing will likely reference the interest rates of the same bank's demand deposits or structured deposits, forming a system anchored to the existing deposit interest rate curve under regulatory guidance, rather than a completely independent "new interest rate product." A more important change at the system level is that bank operating institutions previously implemented 100% reserve requirements for digital renminbi, which will now shift to partial reserve management, while non-bank payment institutions will continue to implement a 100% margin system, creating clear differences in fund utilization and risk-bearing. Partial reserves mean that the same unit of base currency can create a higher money multiplier through the expansion of the bank's balance sheet, theoretically enhancing system liquidity. Based on the current cumulative transaction volume of 3.48 billion transactions and 16.7 trillion yuan, even if only a small portion is retained as interest-bearing balances, under the combination of partial reserves and re-lending mechanisms, it could potentially leverage credit derivation space in the range of hundreds of billions to trillions of yuan (this is merely a scenario simulation and not an accurate prediction). From a regulatory perspective, this transformation will more closely integrate digital renminbi into the existing deposit insurance and prudential regulatory framework, requiring the design of supporting capital constraints, liquidity coverage ratios, and interbank liability ratio regulations to address liquidity risks, maturity mismatches, and potential migration effects of traditional deposits, preventing the "savings absorption" of digital renminbi from causing asymmetric shocks to small and medium-sized banks.

From Accounts to On-Chain: Hybrid Architecture and…

In a recent article, Lu Lei summarized the technology and institutional form of digital renminbi as a "hybrid architecture that combines features of bank accounts and value (blockchain technology)." From the perspective of architectural division of labor, the account system remains the foundation of digital renminbi, responsible for KYC, account management, fund inflows and outflows, and the majority of high-frequency retail and wholesale payment scenarios; while digital currency strings, smart contracts, and blockchain technology are used to carry asset mapping, conditional payments, and multi-party collaborative transactions in specific scenarios, enhancing programmability and settlement efficiency through the "value layer." In the massive retail small payment and wholesale clearing segments, relying on a centralized account system can achieve low-cost, high-concurrency processing while maintaining regulatory visibility and risk isolation of fund flows; when transactions involve multi-party trust, inter-institutional asset transfers, or require the automatic execution of complex terms, blockchain and smart contracts provide "trustless" collaborative tools. Taking the international operation center of digital renminbi as an example, it has built a blockchain service platform and digital asset platform based on "Chengfang Chain," dividing business domains under a unified ledger and enabling payment and asset migration across different chains through cross-chain transfer capabilities. On-chain settlement tools and a unified ledger ensure that the issuance, registration, custody, and fund settlement of assets such as bills, trade financing tools, and carbon emission rights can all leave traces on-chain. This combination of "penetrable regulation" and on-chain settlement technology provides the infrastructure for subsequent precise identification and classification management of cross-border capital flows and the paths of inflows and outflows of crypto assets, leaving greater operational space for regulators in terms of refinement and real-time capabilities.

Instant Feedback on Fund Flows and Market Pricing

From the feedback on the funding side, the performance of A-share digital currency concept stocks quickly reflected the market's "vote" on the new framework: according to Tonghuashun data, after the announcement of the central bank's action plan, the digital currency sector strengthened overall in the afternoon, with Lakala rising over 10%, Sifang Jingchuang up over 5%, and stocks like Cuiwei Co., Chutianlong, and New Guodu rising to varying degrees, indicating that funds are generally betting that the payment, terminal, and software service sectors will gain new business space after the deposit transformation and interest calculation of digital renminbi. In terms of narrative, KOLs and media summarized this reform as "money is no longer just change, but deposits that can earn interest and have insurance," emphasizing the account-based, commercial bank liability attributes, and deposit insurance backing. This narrative constitutes a medium- to long-term positive expectation for bank stocks: on one hand, it may enhance deposit stickiness through digital channels, and on the other hand, it helps banks occupy a central position in cross-border and digital asset services. For payment and technology stocks, the market expects them to gain higher prosperity in areas such as wallet operations, smart contracts, blockchain infrastructure, and risk control compliance. From an emotional observation perspective, the community is generally optimistic, with a clear FOMO atmosphere, but the discussion heat has not yet broken out, with most views remaining at the level of "policy expectation trading," rather than a fundamental reassessment based on landing data. Key indicators to track in the future include: the overall balance of digital renminbi and the growth rate of daily average transaction volume; changes in the scale and cost rate of traditional demand deposits at major banks; changes in the proportion of digital renminbi-related liabilities in the asset-liability structure of participating operating institutions; and the marginal increase in profit contribution from digital renminbi-related interest spread businesses, to determine whether the funding side has truly completed the transition from sentiment to allocation.

Controversies Over Asset Control and Cross-Border Capital Games

Surrounding the policy adjustment of interest-bearing digital renminbi, the market has also revisited the path from "early clear non-interest payment" to "entering the interest-bearing era," with some views seeing this as inconsistency in policy. However, considering the central bank's evolution of the digital renminbi's positioning from "cash substitute" to "deposit currency and financial infrastructure upgrade tool" in recent years, a more reasonable interpretation is that during the pilot phase, the regulatory priority was to weaken the "savings absorption" attribute and stabilize the banking system by not paying interest. Once the technology matures, the ecosystem begins to take shape, and the supporting regulatory framework is more complete, interest incentives and partial reserve mechanisms will be gradually introduced, rather than a simple policy reversal. In terms of public opinion, some users are concerned that the promotion of digital renminbi will further strengthen asset control, especially under the technical premise of "more penetrable and easier identification of virtual currency-related funds," believing this will increase the probability of identifying crypto asset transactions and cross-border capital transfers. Such concerns have some rationality in terms of "tracking capability" and "identification accuracy," but extrapolating to extreme scenarios of "complete prohibition or arbitrary deductions" is clearly exaggerated and even emotional. Against the backdrop of tightening regulations on C2C outflows, bank cards, and third-party payments, the high traceability of digital renminbi may indeed become one of the key tools for future regulation of cross-border capital and crypto asset inflows and outflows, making any funds related to "virtual currencies" more likely to be tagged as highly sensitive. Meanwhile, Hong Kong is seen as a "crypto testing zone," combined with discussions on the closure of Hainan and the division of onshore and offshore systems, forming a narrative landscape of "mainland归 digital renminbi, innovation归 Hong Kong." If the interest-bearing and internationalized digital renminbi continues to advance in cross-border trade, compliant asset digitization, and the opening of overseas wallets, it will form a more complex game relationship with offshore renminbi channels and stablecoin pathways in the medium to long term, enhancing the controllability of onshore funds while partially replacing gray inflow and outflow paths through institutionalized and compliant digital channels.

Internationalization Process and Substitution Effect on Stablecoins

In the past year, the technological and institutional groundwork for the internationalization of digital renminbi has clearly accelerated: on one hand, China has engaged in cooperation with countries such as Laos, Singapore, and Thailand through the multilateral central bank digital currency bridge project, promoting the landing of cross-border payment pilots; on the other hand, the international operation center centered in Shanghai has been launched, with blockchain and digital asset platforms built on "Chengfang Chain" gradually going online, establishing an infrastructure system of "unified ledger + business domains + cross-chain transfer." Combined with Lu Lei's statement about the future digital renminbi "having currency value measurement, value storage, and cross-border payment functions," it can be seen that its goal is far beyond "another form of mobile payment," but rather to provide a full-stack solution covering everything from currency to assets in the on-chain issuance and settlement of cross-border trade settlements, bill financing, carbon emission rights, and other assets. In this process, Chinese officials have repeatedly stated their opposition to the development of renminbi stablecoins, believing that the stablecoin models represented by USDT and USDC pose risks in foreign exchange management and tax systems, while central bank digital currency has a leading advantage in compliance and technical capabilities. The resulting regulatory direction is to encourage the development of digital renminbi as the only path, explicitly excluding stablecoins from the mainstream compliant financial system. In compliant scenarios, the substitution boundaries of digital renminbi for USDT and USDC are relatively clear: in cross-border trade, official project financing, and fund settlements between regulated financial institutions, digital renminbi is expected to gradually replace some functions of dollar stablecoins; while in decentralized trading, global retail speculation, and no KYC scenarios, stablecoins will still maintain dominance for a considerable time. Key indicators to observe in the future include: the proportion of amounts and transactions settled in digital renminbi in cross-border payments; the depth of overseas institutions and individuals opening digital renminbi wallets and the number of countries covered; collaborative progress with friendly jurisdictions in regulatory mutual recognition, data sharing, and anti-money laundering compliance; and the scale of on-chain settlements in segmented assets such as bills and carbon assets, all of which will determine the real weight of digital renminbi in the global payment and asset digitization landscape.

Trade-offs Between Interest Incentives and Regulatory Penetration

The interest calculation and partial reserve reform of digital renminbi essentially represent a dual upgrade of currency form and financial infrastructure: at the currency level, it shifts from "non-interest-bearing digital cash" to "interest-bearing digital deposit currency," further integrating into the liability and monetary policy transmission system of commercial banks; at the level of bank asset-liability structure, digital renminbi liabilities and traditional deposits will form a competitive relationship of mutual rise and fall, while expanding the asset allocation space of banks through partial reserves and cross-border payment scenarios; in the payment ecosystem, payment institutions and technology companies will build a new round of infrastructure competition around wallets, smart contracts, blockchain foundations, and risk control systems. The bullish logic focuses on three aspects: first, interest incentives are expected to enhance users' willingness to hold, increasing digital renminbi balances and transaction activity; second, programmable payments and cross-border settlements will release efficiency dividends, bringing new demands for trade finance and asset digitization; third, with the support of multilateral CBDC bridges and international operation centers, the internationalization potential of digital renminbi is amplified. Bears or cautious observers worry that the combination of high traceability and penetrable regulation will strengthen expectations of asset control, further tightening channels for inflows and outflows of crypto assets and the freedom of cross-border capital, while uncertainties still exist regarding privacy protection and data usage boundaries. Looking ahead, if interest rate pricing can form a reasonable spread with traditional deposits, interbank collaboration is smooth, cross-border interconnectivity mechanisms gradually mature, and regulatory boundaries are clear, digital renminbi is expected to complete the leap from "policy engineering" to "daily infrastructure" within 2-5 years, squeezing the space for stablecoins and gray payment channels in compliant scenarios; conversely, if interest rates lack attractiveness, banks are overly defensive against liability migration, cross-border mutual recognition progresses slowly, and regulatory standards fluctuate frequently, the adoption speed may fall below current optimistic expectations, and the spillover effects on the crypto ecosystem will remain more at the level of sentiment and compliance direction rather than directly altering the funding supply structure of the crypto market.

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