In 2026, there is a big news at the beginning of the year that few people pay attention to: the digital renminbi begins to accrue interest. This means that the digital renminbi has ended its M0 positioning in the past and begun to shift to M1, and may also become M2 in the future. this
I have to mention a general background. In the past, the digital renminbi as M0 not only had no interest, but also had no handling fees for transactions. This is very different from card swiping, QR code, and NFC transactions. In the above-mentioned transactions, the issuing bank, acquiring agency, and clearing agency all have handling fees, so everyone is motivated to do things. There are no handling fees for digital currency transactions. Merchants are of course happy, but the institutions working in the middle have no money to make. For these commercial companies, it is tantamount to doing charity. If there is no task above their heads, no one is willing to donate. On the other hand, as a digital research institute itself, its role is similar to that of a transfer clearing organization in the four-party model - of course it cannot be fully benchmarked, and it itself lacks profit methods.
Some people may say that the Institute of Mathematics and Statistics is under the control of the central bank. Doesn’t the central bank have a lot of money? This is the problem. Although the central bank has a lot of money, it cannot completely donate it to the Digital Research Institute. Taking the simplest salary expense as an example, there are currently two groups of people in the Digital Research Institute. One group of people are former employees of the central bank, and they are still in the civil service establishment. They have very stable jobs and can be promoted from section clerks, division directors, and directors, but the price of stability is the salary of the benchmark civil servants; The central bank can pay wages to the first wave of people, but it is legally difficult to fully guarantee the wages of the second wave of people. Therefore, market-based recruitment of talents has previously signed contracts with entities from various places, including Shenzhen, Suzhou, Chengdu and other places, and relies on local financial subsidies to obtain a source of income to a certain extent. Relevant institutions have also held many meetings to discuss the survival of the institution. At this time of life and death, positioning the digital currency from M0 to M1 will undoubtedly expand the means of generating income and lay a good foundation for future integration with the capital market.
The core of digital RMB's transformation from M0 (cash in circulation) to M1 (narrow currency) is the transformation from "digital cash" that does not bear interest to "digital deposits" that bear interest. This is the core change since the implementation of the "Action Plan on Further Strengthening the Construction of Digital RMB Management Service System and Related Financial Infrastructure" on January 1, 2026.
What's the difference?
Key architecture and technologies behind the transformation
To achieve the above changes, we rely on two core foundations:
1. Hybrid technology architecture: The technical solution is "account system + currency string + smart contract". This ensures that on the basis of the account system (guaranteeing supervision and efficiency), value transfer and programmability capabilities are integrated to support innovative applications such as smart contracts.
Account system = your identity and safe (having an account in the bank, real-name information, easy and safe management).
Coin string = uniquely numbered cash in a safe (each one can be independently tracked and transferred peer-to-peer).
Smart contract = a self-executing “little note” attached to cash (saying “This money can only be paid to the supermarket on Friday” or “Automatic transfer when conditions are met”).
The combination of the three forms a "super currency" that has bank security, can be transferred as flexibly as cash, and can automatically execute complex rules.
How do the three work together?
The beauty of this architecture is synergy. For example, the government issues a “special consumption subsidy”:
The account system confirms your eligibility to receive the subsidy and credits the subsidy amount to your digital wallet.
This money is not an ordinary balance, but is encapsulated into a specific currency string with a smart contract attached. The contract rule is: "This fund can only be used to purchase specific products at designated merchants within 3 months."
When you pay, the system will automatically verify whether the merchant, product, and time limit are compliant. If the payment is successful according to the rules, the funds will be converted into ordinary currency that the merchant can use freely; if the transaction is illegal, the payment will fail.
What fundamental problem does this architecture solve?
It perfectly balances the seemingly contradictory goals in digital currency design:
Balance between efficiency and security: use the account system to ensure supervision and efficiency, and use currency strings to achieve accurate and traceable transfer of value.
Balance between payment and expansion: Basic payment is extremely simple and efficient, but through currency string + smart contract, it can be infinitely expanded to a variety of commercial and financial applications (such as supply chain finance, prepaid card management, automatic tax deduction).
The combination of center and distribution: The "global ledger" of the central bank ensures the control of sovereign currency, while the value transfer characteristics of currency strings absorb the advantages of distributed technology.
The central bank is still responsible for top-level design and management ("one global ledger"), but has clearly handed over customer-facing services, responsibilities, and asset and liability management rights to commercial banks, achieving parity of rights and responsibilities.
Interest calculation scope and institutional differences
Interest accrual scope: Currently only the balance of the real-name wallet will accrue interest at the current deposit rate, and the anonymous wallet will not accrue interest.
Differences in payment institutions: Non-bank payment institutions (such as third-party payment platforms participating in future operations) still need to pay a 100% deposit. This is mainly due to the fact that non-bank payment institutions do not have the qualifications to carry out deposit business and do not have the ability to derive currency.
Deep meaning and impact
The significance of this change is far more than just "starting to generate interest". Its more far-reaching impact is:
To users and the market: Interest calculation and deposit insurance directly enhance the attractiveness. In the future, banks may develop exclusive financial management and credit products around digital renminbi to form a "payment + finance" ecosystem.
On the financial system and national strategy:
Improve the efficiency of monetary policy: Digital RMB transactions provide more real-time and accurate data, helping the central bank to monitor and transmit monetary policy more effectively.
Preventing financial risks: Fully integrating the digital renminbi into traditional regulatory frameworks such as reserves will help prevent risks such as "financial disintermediation."
Consolidating its international leading position: China is the first major economy in the world to explicitly calculate interest on central bank digital currencies, which strengthens its voice in rule-making.
Promote the internationalization of the RMB: After interest calculation, the digital RMB can be more easily connected to the global inter-bank system. At the same time, its cross-border projects (such as mBridge) relying on blockchain have greatly improved the efficiency of cross-border payments.
In general, the transformation of digital renminbi from M0 to M1/M2 has upgraded it from a pure "payment tool" to a fully functional "financial infrastructure", and strives to lay an institutional foundation for wider popularization and deeper applications (such as supply chain finance, cross-border trade, etc.) in the future through market-oriented incentives.