China has taken a decisive step in reshaping global finance as its digital yuan, or e-yuan, entered a new phase on January 1, 2026. The People’s Bank of China (PBOC) has begun allowing commercial banks to pay interest on digital yuan holdings, significantly boosting its appeal as BRICS nations intensify efforts to reduce reliance on the US dollar.
This policy shift marks a transformation of the e-yuan from a simple digital cash instrument into what Chinese officials describe as a “digital deposit currency.” The interest-bearing structure applies to verified individual and corporate wallets, while anonymous wallets remain excluded.
According to Lu Lei, deputy governor of the PBOC, “The currency will transition to an era with functions of monetary value scale, value storage, and cross-border payment.”
The timing aligns with broader BRICS de-dollarization strategies. BRICS countries now control roughly 50 percent of global gold production and collectively hold more than 6,000 tonnes in reserves. Between 2020 and 2024, BRICS central banks accounted for over half of global gold purchases, the longest sustained buying streak in modern history, according to the World Gold Council.
China’s digital yuan already operates at scale. By the end of November 2025, it had processed 3.48 billion transactions worth approximately 16.7 trillion yuan. Confidence has been further strengthened by extending China’s deposit insurance scheme to cover digital yuan balances, placing them on par with traditional bank deposits.
On the international front, the PBOC has launched the International Digital Yuan Operations Center in Shanghai, while cross-border pilots are underway in Singapore, Thailand, Hong Kong, the UAE, and Saudi Arabia. By late 2025, the e-yuan accounted for more than 95 percent of transactions on the multi-currency mBridge network.
Analysts describe the combination of interest-bearing digital currency and expanding BRICS gold reserves as “two-sided pressure” on the dollar. While over 80 percent of global trade remains dollar-invoiced, China’s blend of technology-driven payments and gold-backed reserve diversification is steadily reshaping the future of cross-border finance.
