China has crossed another threshold with the digital yuan — Digital TL team, pay attention!

The People’s Bank of China’s (PBOC) decision to start paying interest on digital yuan balances demonstrates that central bank digital currencies (CBDCs) are no longer merely payment instruments, but have become direct components of monetary policy and the financial architecture. With this step, the digital yuan is evolving from “digital cash” into digital deposit money; banks remain at the center of the system as customer interfaces, wallet managers, and interest payers, while the central bank assumes the role of infrastructure provider and supervisor. This model offers a field-tested alternative to the widely cited claim in the literature that “interest-bearing CBDCs would disrupt the banking system.”

As of today, the digital yuan has already proven its scalability, reaching billions of transactions and trillions of yuan in volume. The transition to an interest-bearing structure goes beyond accelerating adoption: it strengthens the programmability of money, enabling incentives, subsidies, and targeted policy instruments to be embedded directly at the monetary layer. The close attention paid by Singapore, Hong Kong, and other Asian financial centers reflects the region’s functional approach to digital public infrastructure and state–market coordination.

For the Central Bank of the Republic of Türkiye (CBRT- TCMB), this development suggests that the Digital TL should be approached not merely as a technical payment project, but as a strategic monetary infrastructure—compatible with the banking system, potentially interest-bearing or tiered, and capable of supporting cross-border trade. The debate has moved beyond “Should we have a CBDC?” to the more fundamental question of how the money of the 21st century should be designed and governed. China’s experience indicates that the cost of moving too late may well exceed the cost of moving early, in a controlled and well-designed manner.

Ercan TANRIBAK - Vice President of Istanbul Digital Economy Club | Co-founder of BSN Turkey | Chainerist |TaCaS Global