China’s central bank announced that a new framework for the digital yuan (e-CNY) will take effect on January 1, 2026, marking a major transition from a digital cash model to a deposit-based digital currency. Chinese state-run media outlet Xinhua reported that the move represents a significant upgrade of the e-CNY from “version 1.0” to “version 2.0.” Key points from the Xinhua report are translated below.
Under the new system, digital yuan balances held in commercial bank wallets will be treated as account-based bank liabilities, similar to traditional deposits rather than cash. Banks will be required to pay interest on verified digital yuan wallet balances in accordance with deposit interest rate guidelines, manage these balances within their asset-liability frameworks, and provide deposit insurance protection equivalent to that of conventional bank deposits. Non-bank payment institutions participating in the system will be required to maintain 100 percent reserve backing for their digital yuan holdings.
The updated framework also brings digital yuan balances into China’s reserve requirement system, clarifying the rights and responsibilities of operating institutions and strengthening regulatory oversight.
As of the end of November 2025, the digital yuan had processed 3.48 billion transactions with a total value of 16.7 trillion yuan. A total of 230 million personal wallets and 18.84 million institutional wallets had been opened. In cross-border applications, the multilateral central bank digital currency bridge handled 4,047 transactions worth approximately 387.2 billion yuan, with the digital yuan accounting for more than 95 percent of total transaction value.
Source: Xinhua, December 29, 2025
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