Overview of the Upgrade
The current round of digital renminbi functionality upgrades will be implemented starting January 1, 2026, prompting adjustments in the business and regulatory frameworks of the People's Bank of China, banking operating institutions, and non-bank payment institutions. According to public information, the balance of real-name digital renminbi wallets will begin to accrue interest, marking a shift from being merely a "zero-interest" payment medium; at the same time, the digital renminbi held by banking operating institutions will transition from 100% off-balance-sheet reserve custody to partial reserve management on-balance-sheet, while non-bank payment institutions will continue to implement a 100% margin system, forming a parallel dual-layer structure. According to Caixin, the balance of real-name wallets will be included in the self-regulatory mechanism for deposit interest rates, and the balance of digital renminbi will be protected by deposit insurance. The combination of these two institutional signals significantly narrows the boundary between digital renminbi and traditional bank deposits. Under this policy combination, a core question arises: as digital renminbi gradually evolves from a purely payment tool to a "deposit-like" form, how will it reshape the landscape of financial intermediation, residents' asset allocation habits, and the overall operational logic of the financial system?
Rules and Structure
Before this upgrade, digital renminbi was positioned as a non-interest-bearing payment tool, with commercial banks primarily interfacing with the central bank's liabilities in the form of 100% off-balance-sheet reserves, mapping the corresponding amounts to user wallets. Non-bank payment institutions achieved fund security through full reserve/margin models, with the impact on the balance sheet being relatively controllable. After the upgrade, banking operating institutions will include digital renminbi liabilities on-balance-sheet and manage them with partial reserves, meaning that a portion of the balance can be used for lending or asset allocation, while non-bank payment institutions will still need to execute 100% margin management for users' digital renminbi funds, continuing to play the role of "channel + payment." According to Caixin, the balance of real-name wallets will be included in the self-regulatory mechanism for deposit interest rates, and the interest rate level must align with the existing deposit interest rate constraint framework. Additionally, the balance of digital renminbi will be protected by the deposit insurance system, providing it with a safety endorsement similar to that of bank deposits. The differentiated arrangements in regulatory requirements between banks and non-bank institutions reflect the regulatory authorities' nuanced distinctions regarding risk, function, and incentives: on one hand, allowing banks some asset utilization space to support credit creation, and on the other hand, maintaining a "full safety cushion" for non-banks to reduce systemic risk and the spillover effects of payment chain instability.
Evolution of Deposit Attributes
The simultaneous introduction of the interest mechanism and deposit insurance protection allows digital renminbi to gradually exhibit asset attributes similar to bank deposits, transitioning from a tool that "only manages payments without discussing returns." For the balance of real-name wallets, inclusion in the self-regulatory mechanism for deposit interest rates means that its yield will be subject to interest rate constraints similar to those of demand and time deposits, while deposit insurance coverage enhances the expectation of principal safety, making it not just a medium of exchange but also a part of residents' savings. In terms of interest rate formation and risk protection, real-name wallets are highly comparable to traditional demand deposits in terms of yield levels and liquidity preferences, but they are more deeply embedded in mobile payment and online-offline scenarios, with shorter operational links. Compared to time deposits, digital renminbi wallets emphasize immediate access and payment functionality, making it difficult to completely replace high-yield products with locked terms. As the balance of digital renminbi enters the bank's balance sheet, it is expected to gradually align with general deposits in terms of statistical and regulatory definitions, potentially clarifying its positioning in broad money and deposit structure statistics. As market opinions suggest, this move "strengthens the position of digital renminbi in the financial system," and its role in residents' asset allocation may evolve from a small payment balance to a "digital demand pocket" that combines payment and liquidity management.
Bank Assets and Liabilities
From a balance sheet perspective, the transition of digital renminbi from 100% off-balance-sheet reserves to partial reserves on-balance-sheet primarily alters the liability structure of commercial banks: this portion previously existed more in the form of "central bank liability mapping + payment settlement responsibility," but now it is closer to a deposit-like liability that can accrue interest and participate in interest rate pricing and liability management. Under the partial reserve mechanism, banks no longer need to hold an equal amount of highly liquid assets as reserves for every unit of digital renminbi balance; instead, they only need to retain a certain percentage of reserves as required by regulations, allowing the remaining portion to be used for lending, bond allocation, etc., thereby obtaining new loanable funds and greater liquidity management space without increasing the apparent deposit scale (the specific ratio has not yet been disclosed). Meanwhile, digital renminbi liabilities may form substitution, migration, or overlapping relationships with traditional demand deposits and structured deposits: if the interest and safety attributes are sufficiently attractive, some deposit funds may migrate from traditional accounts to digital renminbi wallets, compressing the bank's low-cost deposit base; conversely, if interest rates converge, digital renminbi balances are more likely to be layered on top of existing deposits in the form of "small, high-frequency payments + partial buffer funds." Within a macro-prudential framework, the on-balance-sheet nature of digital renminbi will change banks' capital adequacy ratios and liquidity management paths through indicators such as risk-weighted assets, liquidity coverage ratios, and net stable funding ratios. Regulatory agencies will also need to adjust stress testing and risk monitoring models accordingly to reflect the behavioral characteristics of this new liability form.
User and Institutional Behavior
Regarding the market judgment that "this will significantly change users' behavior in using and holding central bank digital currency," it can be expected that the introduction of interest and deposit insurance will increase residents' willingness to hold digital renminbi and extend the average holding time of some funds: what was originally more of a "pay-as-you-go" payment change may evolve into a combination of "putting in a little more in advance" for payments and reserves. In payment scenarios, as digital renminbi wallets can earn certain returns and enjoy deposit insurance protection, the weighting of users' choices among traditional bank card payments, third-party payment balances, and digital renminbi may be redistributed, with an upward trend in the proportion of digital renminbi payments in high-frequency scenarios such as daily consumption, transfers, and bill payments. For banks and non-bank payment institutions, the design of wallet products, yield displays, and scenario ecosystems around digital renminbi will become a new frontier for competition and cooperation: banks may strengthen retention through interest rate strategies and integrated account management, while non-bank institutions will need to explore more value-added services and scenario binding while continuing to execute 100% margin management to maintain user stickiness. At the institutional level, the stability of the sources of digital renminbi liabilities, cost structure, and returns on technology investments will be reassessed, and the marginal costs of IT systems, compliance monitoring, and risk management must be weighed against new payment and deposit business opportunities, thereby influencing the intensity and pace at which various institutions embrace or cautiously advance digital renminbi business.
Systemic Impact
From the perspective of monetary policy transmission, the interest-bearing nature of digital renminbi and its inclusion in the self-regulatory mechanism for deposit interest rates are expected to enhance its linkage with policy interest rates, allowing the interest rate corridor to extend more smoothly to end residents' assets: when the interest rate of digital renminbi changes with policy adjustments, residents can more intuitively perceive changes in the interest rate environment, improving the efficiency of monetary policy's impact on consumption and savings decisions. Under partial reserve management, commercial banks can utilize digital renminbi liabilities to participate in credit creation, and its role in the money multiplier and credit expansion will gradually synergize and compete with traditional deposits, on one hand expanding the potential space of the money multiplier, and on the other hand possibly amplifying pro-cyclical fluctuations during economic upturns or downturns, posing higher demands for macro-prudential management. The differentiated regulatory path—banks executing partial reserves while non-banks maintain full margins—seeks to balance financial stability and the robustness of the payment system: the former allows banks asset utilization and innovation capabilities, while the latter provides a "hard isolation" safety cushion for the payment chain to reduce the risk of systemic liquidity runs and technical failures. This upgrade is seen as a step towards the complexity of digital renminbi's monetary functions, transitioning from a purely payment tool to a multifunctional currency form with interest-bearing and on-balance-sheet liability attributes, and the institutional signals it releases will influence the further evolution of limit management, wallet stratification, inter-institutional clearing, and risk mitigation arrangements in the future.
Outlook and Variables
This upgrade has reshaped the positioning of digital renminbi across multiple dimensions: in terms of monetary attributes, it has shifted from a non-interest-bearing payment medium to a "deposit-like" asset with returns and insurance protection; in terms of bank liability structure, it has transitioned from 100% off-balance-sheet reserves to partial reserves on-balance-sheet, expanding banks' liability management and asset utilization space; in terms of its role in the financial system, it has further embedded itself into the financial intermediation and monetary policy transmission chain. However, key parameters still remain uncertain: including the specific interest rate level for digital renminbi, the interest rate spread arrangements with demand and other deposit products, and the specific ratio requirements for partial reserves have not yet been disclosed. In this context, it is impossible and inappropriate to make numerical guesses about future yields or money multiplier effects; their true impact needs to be gradually verified through the disclosure of policy details and practical operations. Future observation will focus on three aspects: first, changes in user holding and usage behavior, especially the proportion of digital renminbi balances in residents' assets and their term preferences; second, the rhythm and direction of banks' asset-liability adjustments, including rebalancing of traditional deposit products, credit allocation, and liquidity management; third, further refinement by regulatory authorities of limits, risk weights, and macro-prudential indicator definitions. The evolution of "the integration of digital renminbi and traditional finance" resembles a long-term institutional and technological path rather than a short-term tradable event, and its deeper impacts will gradually emerge through multiple rounds of feedback.
Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh
OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
