China Adds Interest to Digital Yuan, Sparking $188 Million Surge in CBDC Stocks

China has taken a decisive step in overhauling its central bank digital currency strategy, transforming the digital yuan from an unyielding form of cash into an interest-bearing financial instrument. The move immediately sparked a wave of investor interest, with roughly $188 million flowing into digital yuan-linked stocks following the announcement.

Digital Yuan gets an interest rate upgrade

On Monday, December 29, the People’s Bank of China announced that from January 1, 2026 commercial banks will start pay interest on digital yuan (e-CNY) wallet balances. Under the new framework, e-CNY shares will be treated more like bank deposits than simply digital cash in circulation.

Previously, the digital yuan functioned as a cash equivalent, generating no returns and limiting its appeal as a store of value. The policy change represents a structural upgrade of the CBDC’s role within the Chinese financial system.

Investors are rushing into e-CNY infrastructure projects

The markets reacted quickly. Chinese investors poured about $188 million into digital yuan-related A-shares following the announcement, according to trading data.

One of the biggest beneficiaries was Lakala Payment, a major third-party payment provider involved in the digital yuan infrastructure. Lakala reportedly captured around 30% of total inflows, with shares rising more than 12% as investors positioned themselves for greater CBDC adoption.

Other fintech and payments companies involved in digital yuan settlement, wallet services and bank upgrades also saw increased trading activity.

Why This Matters for Crypto and CBDCs

The introduction of interest fundamentally changes the incentives around holding e-CNY. Until now, users have had little reason to keep their balances in digital yuan wallets, compared to platforms like Alipay or WeChat Pay, which offer access to yield-generating money market products.

By allowing interest on e-CNY funds, the PBOC closes that gap, encouraging users to hold digital yuan instead of immediately converting or spending it. This also signals a deeper shift in classification: the digital yuan is moving away from pure M0-style cash and towards a form of deposit-like money, potentially useful within bank reserves and lending frameworks.

A blueprint for “CBDC 2.0”

In addition to domestic adoption, the change positions China’s CBDC as one of the most economically integrated digital currencies issued by a major central bank. The interest-bearing functionality brings the digital yuan closer to the core of monetary policy transmission, something most CBDCs worldwide have avoided so far.

With the new rules coming into effect on January 1, 2026, investors are already seeing this as the start of a ‘Digital RMB 2.0’ phase, one in which infrastructure providers, not just consumers, will benefit the most.

As global central banks continue to experiment with digital currencies, China’s move underlines an important lesson: adoption follows incentives, and yields may be the strongest yet.