China to offer e-CNY interest from 2026 to encourage adoption and challenge WeChat Pay
JAKARTA – China is once again pushing the development of its central bank digital currency by introducing interest payments on digital renminbi (e-CNY) balances starting in 2026.
The policy is aimed at boosting the appeal of the e-CNY, which has so far struggled to gain traction amid the dominance of WeChat Pay and Alipay in China’s digital payments market.
As reported by straitstimes.com, the payment of interest at a rate comparable to demand deposits shifts the e-CNY from being merely a cash-like payment tool to an instrument that more closely resembles a bank deposit.
“e-CNY has undergone extensive trials, but it has still failed to create regular users,” said Winston Ma, an adjunct law lecturer at New York University, adding that the move shows “China is taking a much bolder step to make it mainstream”.
China has been piloting the e-CNY since 2019 and has rolled it out to almost all major cities, including Beijing and Shanghai. Although local governments have at times distributed e-CNY through lotteries or used it to pay salaries, adoption remains far behind that of the main payment apps.
By the end of November 2025, cumulative e-CNY transaction volume had reached 16.7 trillion yuan, yet WeChat Pay and Alipay are estimated to control more than 90 per cent of the mobile payments market. “Adoption has clearly been slower than we expected,” said Charles Chang, a finance professor at Fudan University, adding that for consumers there is a strong “so what’s the difference?” factor.
The roughly 0.05 per cent interest policy also creates new incentives for banks, as the e-CNY now has legal status equivalent to deposits, allowing it to be recorded on bank balance sheets and extended as credit. The Chinese government itself has stressed that “the e-CNY must be developed gradually” in an economic policy document released in October 2025.
Beyond domestic considerations, Beijing views the e-CNY as a strategic tool to expand the global use of the renminbi.
“This technology allows authorities not only to track where money flows, but also to programme how those funds move,” said Zennon Kapron of GL Insight, referring to the potential for more targeted stimulus, the application of smart contracts, and cross-border payment trials through Project mBridge. (DH/LM)
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