Digital RMB real-name wallet interest calculation draft implemented: a subtle shift from "cash" to "deposits"

The recent announcement from the six major state-owned banks quietly triggered an important change in the digital renminbi. Starting from January 1, 2026, customers’ digital renminbi real-name wallet balances at these banks will accrue interest at the prevailing savings deposit rate. This sounds simple, but behind it lies a profound restructuring of monetary attributes, legal positioning, and banking account systems.

From “Money” to “Debt”: An Identity Shift in Accounting

Many people’s first question is reasonable: Isn’t digital renminbi just a digital version of cash? Cash has never paid interest, so why does it now?

Behind this question is a fundamental transformation. When banks start paying interest on wallet balances, this money is no longer merely “cash” in legal and accounting terms, but becomes “deposits”—more precisely, a bank liability owed to you.

In the “White Paper on the Progress of Digital Renminbi Research and Development” published by the People’s Bank of China in 2021, the positioning of digital renminbi is clearly stated: “Adhere to M0 positioning, no interest paid.” This is not a casual statement but a core principle. M0 refers to cash in circulation; the initial design of digital renminbi was to replace cash, not bank deposits.

However, when certain types of real-name wallets’ balances are managed as deposits and accrue interest, the statistical attributes of these funds subtly change—from M0 (cash) towards M1 (demand deposits). This indicates that part of the digital renminbi funds are entering the bank’s balance sheet.

The “Three Papers” in the Legal Framework

To understand what this shift means, we need to look at three key documents:

First: The “Draft Amendment to the People’s Bank of China Law” (October 2020) explicitly states that digital renminbi is legal tender, belonging to the category of RMB. This identity is fundamental.

Second: The “Deposit Insurance Regulations” (implemented since 2015) stipulate that the maximum compensation for all insured deposit accounts of the same depositor at one bank is 500,000 yuan. This seemingly technical clause determines whether your money can be covered by “deposit insurance.” Cash is not covered, but if your digital renminbi wallet is treated as a deposit by the bank and reflected on the balance sheet, that portion of funds falls under this protection.

Third: The “Anti-Money Laundering Law,” “Personal Information Protection Law,” and other compliance frameworks specify that, under the premise of “controlled anonymity,” when funds reach certain scales or transaction frequencies, KYC (Know Your Customer) and transaction review procedures are required. Strongly real-name wallets are designed to meet these requirements.

These three documents outline a complete legal framework: when the digital renminbi wallet balance accrues interest, it shifts from “central bank-issued legal cash” to “bank-managed deposit claim.”

Wallet Tiering: Details Determine Attributes

The ingenuity of digital renminbi lies in its “tiered operation” design. Different levels of real-name wallets enjoy different treatments:

Type I Wallets (Strongest real-name verification) require in-person verification at bank branches, identity validation, and binding to the account holder’s bank account. These wallets have no quota limit and offer the greatest “power.” They are most likely to be treated by banks as high-value customer assets and to accrue interest.

Type II Wallets (Moderate real-name verification) can be opened online, require facial recognition, and must be linked to the user’s bank account. They have higher daily transaction limits, suitable for large daily payments. These wallets may also be included in interest accrual.

Type III Wallets (Basic real-name verification) are authenticated only by phone number + ID information, without binding a bank account. They have lower limits and balances, mainly used for small retail transactions. These wallets are closer to “cash card” nature and less likely to accrue interest.

Type IV Wallets (Weakly verified / Anonymous) only require phone number registration, even supporting overseas numbers and foreign cards. These are “visitor wallets,” with the lowest limits and balances. As quasi-cash tools, they are unlikely to be paid interest.

A simple rule is: the stronger the real-name verification, the easier it is to bind deeply with bank accounts and the more likely it is to be “deposited”; the weaker the verification, the more it retains the “digital cash” characteristics and remains distant from interest arrangements.

Banks’ “Business Logic”: Liabilities and Assets

Understanding why banks promote this interest arrangement requires looking at their ledger logic.

When customers deposit money, the bank gains a “deposit liability.” To offset this liability’s cost, banks lend out loans, purchase bonds, and invest on the asset side, profiting from the interest spread. If the reserve requirement ratio is 10%, theoretically, for every 100 yuan of deposits received, the bank can deploy about 1,000 yuan on the asset side (this is the so-called “money multiplier” mechanism).

Now, by paying interest on real-name wallet balances, banks gain a new low-cost liability source. Although these funds originate from the digital renminbi system, once they are consolidated as “demand deposits,” banks can, following the usual deposit logic, extend more loans and investments on the asset side. In macro terms, this may alter the proportions of M1 and M2 in monetary statistics.

A New Window for Cross-Border Payments

This change also has an overlooked dimension: it provides a more user-friendly payment solution for inbound tourists.

Type IV tourist wallets support registration with overseas phone numbers and binding of foreign cards like Visa and Mastercard. A tourist arriving in China can, right after landing, open a wallet in the digital renminbi app using their passport and foreign card, then pay via QR code or “touch and go” at convenience stores, restaurants, scenic spots. Even in offline scenarios (such as some scenic areas or subways), dual offline payments can work.

This design solves the long-standing “payment inconvenience” for inbound tourists and subtly signals the internationalization of the renminbi, especially in its digital form.

Clarifications on Several Details

If you already hold or plan to hold a digital renminbi wallet, these details should be confirmed:

• Your wallet type: Check via the app to confirm whether you are Type I, II, III, or IV. Different levels of verification entail significant treatment differences.

• Interest accrual and rate levels: Different banks and wallet types may have different interest policies. The posted savings deposit rates are also changing; do not assume interest is fixed.

• Deposit insurance applicability: If your wallet is treated as a deposit and reflected on the bank’s balance sheet, amounts within 500,000 yuan are protected by deposit insurance; amounts beyond depend on central bank credit. If managed as digital cash, safety relies on the legal status of fiat currency.

• Fees and limits: Interbank transfers, withdrawals, and wallet transfers vary by bank. Read the service agreements carefully; do not guess.

• Privacy and compliance boundaries: Small daily transactions emphasize privacy, but large or frequent transactions will undergo AML review. This is a necessary part of the system design and should not be over-interpreted.

The Underlying Logic Has Not Changed

Finally, it must be clarified: this “interest-paying” arrangement does not fundamentally alter the positioning of digital renminbi.

Digital renminbi remains a M0-positioned legal digital currency, issued by the central bank, with the dual-layer operation system still the basic framework. The change only allows certain wallet types (mainly strong real-name wallets) to be managed via “deposit-like” treatment—an operational differentiation, not a complete shift.

This “layered coexistence” has several practical effects:

• For users, account experience becomes closer to traditional bank accounts, with interest incentives increasing retention.

• For banks, it provides a low-cost, relatively stable liability source, improving asset deployment capacity.

• For macro statistics, funds originally classified as M0 shift to M1, adjusting the monetary structure.

But not all digital renminbi will become “deposited”; rather, deposit relationships form in specific scenarios. Boundaries and details are crucial.

Advice for the Public

If you plan to make full use of digital renminbi, these points are most practical:

1. Identify your wallet type: Check via the app to understand your rights and obligations.

2. Compare interest policies across banks: Although all follow the savings deposit rate, implementation details may differ.

3. Balance privacy and convenience: If privacy is a priority, choose Type III or IV wallets; if you seek yield and functionality, Types I and II are better.

4. Keep official notices and service agreements: Regulatory and bank policies are evolving; written documents are the most reliable evidence.

5. Be rational about returns: The interest on demand deposits is inherently low; do not expect significant financial gains from digital renminbi interest.

Overall, the implementation of this “interest arrangement” marks an evolution from “one-size-fits-all” to “tiered differentiation” in digital renminbi operation. It is not revolutionary but an incremental step. Under the premise of “reliable, prudent, and orderly,” digital renminbi explores how to better integrate into daily life, serve cross-border payments, and optimize the banking system, while maintaining financial stability and risk control boundaries. Understanding this delicate balance is more meaningful than simply chasing interest income.