Interest-bearing Digital RMB boosts Hong Kong’s offshore RMB hub and tokenized asset settlement
China’s digital renminbi (e-CNY) enters a 2.0 phase from Jan 1, 2026: wallet balances will earn interest and its legal status shifts toward carrying commercial-bank liability attributes. This makes e‑CNY the first retail CBDC to pay interest to ordinary users. The redesign integrates e‑CNY into commercial banks’ balance sheets, giving banks management and revenue rights and aligning incentives for active promotion. The model aims to avoid disintermediation risk, enable deposit insurance, and create a new policy tool—an interest rate on CBDC—with improved traceability for targeted monetary measures. For Hong Kong, an interest-bearing e‑CNY is expected to: 1) strengthen its offshore RMB liquidity pool by encouraging longer-term onshore funds to stay in Hong Kong; 2) raise the appeal of tokenized asset issuance and DvP settlement by offering sovereign-backed, high-credit settlement currency with programmable features; 3) spur fintech and banking product innovation (deposits, yield products, smart-contract integrations); and 4) complement Hong Kong’s wholesale-focused digital HKD (num‑HKD) by serving cross‑border retail payments and trade settlement. The article argues e‑CNY2.0 forms a hybrid between tokenized bank deposits and sovereign CBDC, providing a high‑credit “settlement rail” for large‑scale asset tokenization and reinforcing Hong Kong’s role as an international digital asset center.
Bullish
An interest-bearing e‑CNY that integrates into bank balance sheets is likely net-positive for crypto and digital-asset markets in Hong Kong and broader RMB-linked liquidity. Short term, the announcement reduces uncertainty and increases demand for RMB-denominated settlement rails and tokenized products, which can boost trading activity in tokenized bonds and RWA-linked tokens. Banks gaining revenue rights creates distribution channels and productization opportunities (yield products, programmable settlement), increasing on‑chain liquidity and institutional participation—factors typically bullish for market depth and adoption. Historically, clearer on‑chain settlement rails and sovereign backing (e.g., euroclear/CSD improvements, tokenized treasury initiatives) have supported issuance and secondary-market liquidity. Risk factors include regulatory frictions, interoperability limits with non-RMB venues, and potential capital flow controls that could dampen cross-border trading; these could temper momentum but not negate the structural boost. Over the long term, a sovereign, interest-bearing CBDC as a high-credit settlement asset should increase demand for tokenized RMB instruments and foster deeper markets in Hong Kong, improving liquidity and lowering settlement friction—supportive for bullish market structure and institutional flows.