SHENZHEN – China began paying interest on
its digital renminbi
from 2026, a move aimed at making the little-used currency more attractive to consumers in a market dominated by online payment giants WeChat Pay and Alipay.
By offering interest similar to demand-deposit rates at banks, Beijing is recasting the e-CNY, its name for digital renminbi, from a cash-like instrument into something closer to a deposit.
“The e-CNY has had broad trials but still hasn’t generated regular users,” said Mr Winston Ma, an adjunct law professor at New York University. The overhaul signals that “China is taking much bolder steps to make it more mainstream”, he said.
Analysts say the move gives consumers and banks more reason to use the digital currency, but it remains unclear how far this will move the needle for a technology that has struggled to find a place in people’s lives.
China has been piloting the e-CNY since 2019, becoming the first major economy to roll out a central bank digital currency. Trials began in cities such as Shenzhen and Suzhou, and have since expanded to most major cities, including Beijing and Shanghai.
To spur adoption in a digital payments market already dominated by WeChat Pay and Alipay, some local governments have given out e-CNY via lotteries or paid salaries with it.
But while its use has been growing, its reach remains a fraction that of the super-apps. The e-CNY’s cumulative transaction volume reached 16.7 trillion yuan (S$3.08 trillion) by end-November 2025 – but WeChat Pay and Alipay are estimated to account for over 90 per cent of the China’s mobile payments market.
“Adoption has certainly been slower than we’ve expected,” said finance professor Charles Chang of Fudan University. For consumers largely used to paying with existing apps, “there is a big so-what factor”, he added.
The latest overhaul seeks to address some of these shortcomings.
E-CNY balances will earn interest aligned with demand-deposit rates, instead of sitting idle. Those rates are currently about 0.05 per cent, and are similar to what users of the super-apps would get if they pay out of their deposit accounts.
Banks also have more commercial incentive to push the e-CNY, now that they have the same legal status as deposits. This means they can bring e-CNY holdings onto their balance sheets and loan some of it out.
China’s leaders view the national digital currency as an important project, writing that “the e-CNY should be steadily developed” in policy suggestions released in October 2025 for the country’s upcoming economic blueprint.
Domestically, one reason the e-CNY was first developed was for the control and visibility it would give Beijing over the flow of funds across the economy, said Mr Zennon Kapron, director of fintech consultancy GL Insight.
The technology allows the authorities to not only track where money is going, but also programme how it flows, he said.
That opens the door to more targeted consumption stimulus, for example, by placing conditions on how and where e-CNY handouts can be spent.
It also enables smart contracts, in which funds are automatically released once specificed conditions are met.
Internationally, China sees the e-CNY as a way to support wider global use of the renminbi as interest in digital currencies grows.
It is testing a cross-border payment platform, known as Project mBridge, with central banks in Hong Kong, Thailand, the UAE and Saudi Arabia.
Last year, it also launched a “digital yuan international operation centre” in Shanghai to promote the internationalisation of the e-CNY.
Still, capital controls and limited yuan convertibility continue to constrain uptake abroad, analysts note.
China’s renewed bid for e-CNY adoption comes amid rising global interest in stablecoins, another type of digital currency designed to maintain a stable value relative to a specified asset, such as the US dollar.
In July 2025, the US made a push for US-dollar backed stablecoins by signing into law a regulatory framework known as the GENIUS Act, seen to be aimed at entrenching dollar dominance in the digital economy.
China, by contrast, classifies stablecoins as cryptocurrencies, which are banned on the mainland.
On the ground, signs of a pick-up remain limited for now.
Two weeks after China rolled out its e-CNY upgrade, little had changed at a neighbourhood mall in Shenzhen, one of the first cities to pilot the digital currency. An ST survey of 22 stores found that only three would accept payments via e-CNY.
“I’ve heard of it, but have never seen anyone use it,” said shop assistant Qiu Shui, 28, of the e-CNY. She added that her photo studio did not offer this payment option because no customer had asked for it, and that she too had not seen a reason to try it.
Analysts caution that while it is too early to judge the impact of the added interest feature, there are limits to how useful it may be.
The e-CNY is a good piece of technology, but it’s “not solving any payment problem” given that WeChat Pay and Alipay already exist, said Dr Zongyuan Zoe Liu, a senior fellow for China studies at the Council on Foreign Relations.
For overseas users, uptake will also hinge on whether businesses and consumers are willing to use more renminbi, observers note.
“Beyond digital innovation, progress also depends on other factors such as established habits, market inertia, and broader economic influence,” said Mr Andrew Fei, a partner at law firm King & Wood Mallesons in Hong Kong who advises companies on digital asset-related transactions.
The e-CNY is important to China’s overall strategy for renminbi internationalisation, “although it is best viewed as a key component, rather than the whole solution”, he said.
Globally, countries are experimenting with different modes of digital money. While China is promoting its sovereign e-CNY, others like the US are leaning towards private-sector alternatives such as stablecoins.
“In 2026 and beyond, we will see this dichotomy in digital currency experiments”, said Mr Ma. “There’s no clear winner yet.”