China’s move to pay interest on the digital yuan is colliding with the GENIUS Act’s ban on stablecoin yields, intensifying questions over whether US digital dollars can remain competitive. China’s move to let banks pay interest on digital yuan wallets from Jan. 1 is sharpening the debate in Washington over whether United States dollar stablecoins are being left structurally uncompetitive by the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act’s ban on yields. The move allows China’s commercial banks to pay interest on balances held in e‑CNY wallets, with officials framing it as a way to better integrate the central bank digital currency (CBDC) into bank balance sheets. Coinbase CEO Brian Armstrong warned in an X post on Wednesday that the decision gives China a “competitive advantage” over US dollar stablecoins and has a “big impact on whether US stablecoins are competitive.” Read more
“China’s Ethereum” co-founders clash on New Year’s Eve over Neo’s treasury, major Asian economies warm up to Bitcoin ETFs. Asia Express Neo co-founders Erik Zhang and Da Hongfei clashed on New Years Eve in a heated public exchange, accusing each other of mismanaging the blockchains treasury and misrepresenting years of internal governance decisions. Neo is a long-running smart contract network founded in 2014 that rose to prominence during the 2017 bull market, when it was widely dubbed Chinas Ethereum. The nickname reflected its early focus on smart contracts and regulatory-friendly design, similar in ambition to Ethereum but marketed as a domestic alternative for Chinas tech ecosystem. Zhang said he originally stepped away from Neo leadership after Da argued that joint oversight of the foundation was slowing the project. Read more
Wu Blockchain reported the policy change listing Real-World Asset tokenization alongside stablecoins, ”air coins,” and crypto mining as illegal activities in China. Several of the largest financial industry associations in China have reportedly signaled that the country’s regulators could crack down on Real-World Asset (RWA) tokenization. According to a notice shared by Wu Blockchain on Monday, the Asset Management Association of China, National Internet Finance Association of China, the China Banking Association, the Securities Association of China, the China Futures Association, the China Association for Public Companies, and the China Payment Clearing Association will no longer consider RWAs as “new technology” subject to regulatory clarification but rather as a “risky” business model. The association listed RWAs, stablecoins, ”air coins,” a term for tokens lacking real value, and mining as illegal activities related to cryptocurrencies. Read more
A Coinbase executive said changes to the GENIUS Act could weaken US dollar stablecoins as China moves to boost the digital yuan by allowing interest-bearing wallets. A senior executive at Coinbase warned that changes to the US stablecoin framework could weaken Washington’s position in the global race for digital payments, just as China moves to make its central bank digital currency (CBDC) more competitive. In a post on X, Faryar Shirzad, Coinbase’s chief policy officer, said the debate over whether US-issued stablecoins can offer “rewards” under the GENIUS Act could hurt US dollar stablecoins’ global competitiveness. He pointed to a recent announcement from China’s central bank as evidence that rival financial systems are moving quickly to enhance the appeal of state-backed digital money. The People’s Bank of China, China’s central bank, this week outlined a framework that will allow commercial banks to pay interest on balances held in digital yuan wallets starting Jan. 1, 2026. Lu Lei, a deputy governor at ...
China’s central bank will let banks pay interest on digital yuan wallets from Jan. 1, 2026, reshaping e-CNY as deposit-like money as the US bans CBDCs. China’s central bank is rolling out a new framework for the digital yuan that will allow commercial banks to pay interest on e-CNY wallet balances starting Jan. 1, 2026, a move officials say will push the central bank digital currency (CBDC) beyond its original role as a cash substitute. The new CBDC framework will allow banks to treat the digital yuan as part of their asset-liability operations, Lu Lei, a deputy governor of the People’s Bank of China, wrote in a PBOC-affiliated China Financial Times article published on Monday. “The digital RMB will move from the digital cash era to the digital deposit currency (Digital Deposit Money) era,” said Lei in the report. “It has the functions of monetary value scale, value storage, and cross-border payment.” Read more