China's Digital Renminbi Opens "Deposit Interest Rate Increase" Starting New Year's Day! Coinbase Policy Director: If the US stablecoin policy makes mistakes, the US dollar hegemony could be shaken

China’s digital yuan is about to undergo a major upgrade: from 2026, real-name wallet balances will earn interest on savings. This move is not only a global first but also triggers high alert within the US cryptocurrency industry: Coinbase Policy Chief publicly warns that if US stablecoin regulation fails, the dollar’s dominant position in future digital financial systems could face serious challenges.
(Background: China’s “counter-stablecoin” stance is set: allowing digital yuan deposits to earn interest, with stablecoin advantages fully diminished)
(Additional context: People’s Bank of China Governor Pan Gongsheng: Insists on cracking down on cryptocurrencies! Stablecoins are still in early development, actively promoting the development of digital yuan)

Six major state-owned banks—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Postal Savings Bank, and Bank of Communications—announced today (31st) that starting January 1, 2026, the balances of real-name digital yuan wallets (including Type 1, Type 2, Type 3 personal wallets, and institutional wallets) opened at their banks will accrue interest at the same rate as their current savings deposit rates, with interest calculation rules identical to those of regular savings accounts.

Digital Yuan to Earn Interest Starting 2026

This policy applies to verified real-name wallets. Currently, the annualized interest rate for savings deposits at the six major state-owned banks is 0.05%. Interest is generally settled on the 20th day of the last month of each quarter and credited the next day, with specific procedures subject to each bank’s regulations. Users do not need to take any additional action; the system will automatically handle interest calculation.

It is noteworthy that digital yuan wallets are divided into four categories, with the fourth being anonymous wallets (opened with only a mobile number), which do not accrue interest to maintain small-value anonymous payment functions. The Bank of Communications explicitly states in its announcement that the balances of the four types of personal wallets will not earn interest.

This change stems from the People’s Bank of China’s December 29 release of the “Action Plan for Further Strengthening Digital Yuan Management Service System and Related Financial Infrastructure Construction.” This plan marks the upgrade of the digital yuan from “digital cash” (interest-free, positioned as circulating currency M0) to “digital deposit currency” (interest-bearing, included on bank liabilities), with balances protected by deposit insurance and capable of expanding more financial services. China thus becomes the first major economy globally to implement interest payments on CBDC (Central Bank Digital Currency) balances. This interest policy is expected to significantly boost user holdings and usage, further promoting the adoption of digital yuan domestically and across borders.

Coinbase Policy Chief Warns: Dollar Hegemony May Be Shaken

In response, Faryar Shirzad (@faryarshirzad), Policy Chief of the US’s largest cryptocurrency exchange Coinbase, posted on X platform on December 31, directly warning about China’s digital yuan interest policy. He pointed out that this move transforms the digital yuan from a simple payment tool into an asset with store-of-value functionality, greatly increasing its appeal in cross-border payments and asset tokenization.

Shirzad emphasized that asset tokenization is the future, and the US’s GENUIS Act passed this year was a visionary bill aimed at ensuring that US-issued stablecoins become the primary global settlement tool. However, the bill prohibits stablecoin issuers from paying interest directly, allowing only third parties to offer “rewards.” He warns that if the US Senate mishandles negotiations on the Market Structure Bill, further restricting or banning these reward mechanisms, the US dollar stablecoins (like USDC) could fall behind digital yuan in functionality at the worst possible time, ceding a key competitive advantage to China and other global rivals.

Shirzad criticizes that vested interests’ lobbyists always resist change, urging negotiators to prioritize maintaining the dominance of the US dollar and the US financial system, rather than merely protecting traditional institutions’ interests.

For those who misunderstand what’s at stake in the debate on offering rewards on US-issued stablecoins under the GENIUS Act, a sobering and timely announcement from the People’s Bank of China that they plan to pay interest on the Digital Yuan. 🇨🇳🇨🇳

Tokenization is the future and… pic.twitter.com/stg8ffKzT7

— Faryar Shirzad 🛡️ (@faryarshirzad) December 30, 2025