China's central bank has officially initiated the historic transformation of the digital yuan from a "Cash-Type 1.0" to a "Deposit-Money-Type 2.0." This pivotal shift, achieved through a trinity of institutional innovations—interest accrual mechanisms, deposit insurance, and reserve requirement management—elevates the digital yuan from a mere payment instrument to a financial asset with value storage capabilities, fundamentally reshaping the underlying architecture of digital finance.
According to a report from December 29th, the People's Bank of China released an "Action Plan for Further Strengthening the Digital Yuan Management Service System and Related Financial Infrastructure," specifying that a new generation of digital yuan measurement frameworks, management systems, operational mechanisms, and ecosystems will be formally launched starting January 1, 2026. Deputy Governor Lu Lei explicitly stated that the digital yuan in customer wallets now constitutes a liability of commercial banks, taking the form of an account-based deposit.
Dongwu Securities noted in its industry commentary that the core of this upgrade lies in the "redefinition of liability attributes + integration into the macro framework," coupled with a dual upgrade of the technical architecture involving "account systems + currency strings + smart contracts." This combination propels the digital yuan from a "pilot product" to a "core bank liability and infrastructure." By the end of November 2025, the digital yuan had accumulated 3.48 billion transactions totaling 16.7 trillion yuan, with individual wallets opened via the app surpassing 230 million.
A Guotai Haitong Securities research report posits that this qualitative change not only addresses the past challenge of user retention due to the digital yuan's non-interest-bearing nature but also, by incorporating it into the reserve management system, closes the loop on the asset-liability logic for banks. This provides a high-frequency, low-loss digital foundation for the internationalization of the renminbi.
Dongwu Securities analyst Wang Zijing emphasized in a recent report that the core mechanism innovation of version 2.0 is reflected in the "redefinition of liability attributes + integration into the macro framework." The plan clarifies that the digital yuan balance in a customer's real-name wallet at a commercial bank is considered an "account-based liability of the commercial bank," and the wallet balances of bank-type operating institutions are uniformly included in the base for calculating deposit reserve requirements.
Guotai Haitong Securities reached a similar conclusion. Analysts Wu Wei, Yao Shijia, and Bao Yanxin stated in their report that by abolishing the "non-interest-bearing" policy for the digital yuan, the central bank is directly channeling liquidity from the liability side of commercial banks into the e-wallet system, marking the end of the era of purely digital cash. Bank institutions will pay interest on real-name wallet balances based on self-regulatory agreements for deposit rate pricing, and deposit insurance will provide security protections equivalent to those for deposits, as mandated by law. This expands the digital yuan's function from a payment tool primarily with M0 attributes to a "digital demand deposit" possessing value storage capabilities.
This mechanism significantly enhances the willingness to hold and use the digital yuan on the user side, while creating manageable space for asset-liability management on the bank side. Dongwu Securities believes the new framework grants banks autonomy in managing the digital yuan balance as part of their asset-liability operations, enabling them to cover operational costs through asset-side allocation and achieve a self-sustaining business model.
The Dongwu Securities report elaborated on three major technological innovations at the architectural level—a digital pathway involving "account systems + currency strings + smart contracts." On one hand, it upgrades the wallet system based on a broadened account concept, maintaining normative standards and low-friction integration with existing bank account rules. On the other hand, it introduces a "currency string" format to enable value transfer and offline circulation, while enhancing verifiability and system resilience, compatible with Distributed Ledger Technology (DLT). Concurrently, it upgrades the digital yuan smart contract ecosystem service platform to support the development of an open-source smart contract ecosystem, propelling the digital yuan from "electronic payment" towards "programmable digital payment."
The significance lies in this: standardization on the account side provides regulatory consistency, clearing efficiency, and operational controllability for large-scale promotion. The compatibility of currency strings with DLT solidifies the foundation for cross-institutional, cross-scenario, and even cross-border collaboration. Embedding business rules into fund flows via smart contracts enables conditional triggering and automatic verification in scenarios like supply chain finance, prepaid fund supervision, fiscal subsidy distribution, and carbon普惠 incentives, thereby reducing misappropriation risks and compliance costs.
The "global single ledger" capability strengthens risk control and statistical precision, contributing to more refined monetary statistics and liquidity management, and enhancing the accuracy of policy transmission and counter-cyclical adjustment.
The Guotai Haitong Securities report added that through a "separation of management and operations," coordinated by a management committee and led by a self-regulatory office for industry standards, the framework strengthens symmetry of power and responsibility, and improves compliance and anti-money laundering governance efficiency. This provides technical assurance for auditing large-scale concurrent transactions and implementing穿透式 regulation of distributed ledgers.
The Guotai Haitong Securities research team believes that the digital yuan's leap to "digital deposit money" is reshaping the liquidity foundation and settlement efficiency of the multi-Central Bank Digital Currency bridge (mBridge). As the version 2.0 architecture formally defines the digital yuan as a commercial bank liability and incorporates it into the reserve framework, its role in cross-border scenarios evolves beyond being a zero-interest payment medium. It becomes a high-quality liquid asset endowed with interest-bearing attributes and sovereign credit guarantees.
According to a Xinhua Net report, the digital yuan currently holds an absolute dominant share of 95.3% in mBridge transactions. By the end of November 2025, mBridge had processed a cumulative 4,047 cross-border payments, equivalent to 387.2 billion yuan. The Guotai Haitong report pointed out that by introducing a deposit insurance mechanism, the risk cost for overseas participating institutions holding digital yuan is significantly reduced, enabling more robust fund position management on top of the "payment-versus-payment" (PVP) principle.
The Dongwu Securities report verified the new architecture's support capacity for large-scale and cross-border scenarios. This architectural upgrade directly optimizes the PVP efficiency for multi-currency settlements, substantially compressing the complex clearing paths inherent in the traditional correspondent banking model.
Guotai Haitong emphasized that the new management system, by granting operating institutions autonomy in asset-liability operations, enables cross-border trade settlements to achieve real-time value exchange directly within the banks' core account systems. This bypasses the high fees and settlement delays characteristic of traditional models. This new form of capital formation, driven by interest-bearing deposit money, is becoming a core force颠覆ing the global traditional payment and settlement system by reconstructing clearing paths and credit foundations.
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