Chinese investors bet $188m on CBDC tech after central bank payout decision

Investment in Digital Yuan - Chinese investors have invested over $188 million in firms focused on the digital yuan following the People's Bank of China's (PBoC) decision to allow central bank digital currency (CBDC) wallets to earn interest [1] - Almost one-third of this investment was directed towards Lakala, a third-party payment service provider [1] Market Reaction - The share price of Lakala rose by over 12% on the Shenzhen Stock Exchange, continuing to rise on December 30 [2] - Other digital yuan-related companies also saw share prices soar by over 10% on the same day, including Hengbao, Cuiwei, ST Rendong, Wuhan Tianyu, and iSoftStone [5] PBoC's Strategy - The PBoC's new action plan for the digital yuan covers the period from 2026 to 2030, allowing banks to independently manage the assets and liabilities of digital yuan wallet balances starting January 1, 2026 [3] - The PBoC reported cumulative transactions using the digital yuan reached $2.38 trillion by the end of November, with 3.48 billion CBDC transactions processed and 230 million personal wallets opened [4] Financial Products and Services - The PBoC's move is seen as beneficial for enterprises and individuals, providing interest income and a wider variety of financial products and services [3] - Commercial banks will receive incentives for conducting digital yuan business, enhancing the overall ecosystem [3] Accessibility of Digital Yuan - While many young and urban Chinese use smartphones and have bank accounts, a significant number remain unbanked or without internet access [6] - The wallets being deployed in the CBDC pilot zone are designed to function offline, addressing the needs of those without internet connectivity [6]