China's ten largest banks, including WeBank and Mybank, will begin paying 0.05% annual interest on digital yuan holdings starting March 20. This initiative aims to boost adoption of China's central bank digital currency (CBDC), which has struggled to gain traction since its pilot launch in April 2020. Interest payments will be issued quarterly, with the first disbursement scheduled for March 20. To receive interest, digital yuan holders must complete a new identity verification process to comply with anti-money laundering regulations. The interest payments will be managed by the banks, marking a shift from the digital yuan being a central bank liability to a commercial bank liability. This move contrasts with U.S. stablecoin regulations, which prohibit interest payments on stablecoins. The People's Bank of China is also exploring options for using the digital yuan to purchase traditional financial assets. As of last month, 3.48 billion CBDC transactions have been processed, with 230 million personal wallets and nearly 19 million corporate wallets opened.