New Delhi, Dec. 31 -- Is China leading the evolution of money?

Its state broadcaster has reported that holdings of its digital yuan will start earning interest next year.

The idea is to promote its adoption, secure a lead among central bank digital currencies (CBDCs) and make headway with global usage.

This last bit won't be easy without Beijing easing capital controls and letting the yuan's exchange rate float freely; notably, neither straps down the US dollar (so far).

That said, we must watch China's test-run of an interest-paying CBDC closely.

Will we see a flight of bank deposits to the full-safety of software run by the central bank that issues the yuan?

Would Chinese banks be asked to focus on risk-pricing for lending and rel...