China renews push for digital renminbi by paying interest

Impact uncertain as market is dominated by WeChat Pay, Alipay

- Joyce ZK Lim

A sign indicating acceptance of e-CNY at a Shanghai mall. By offering interest similar to banks' demand-deposit rates, Beijing is recasting the e-CNY from a cash-like instrument into something closer to a deposit.

(PHOTO: REUTERS)

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$3.1 trillion) by end-November 2025 — but WeChat Pay and Alipay are estimated to account for over 90 per cent of China’s mobile payments market.