From M0 to Interest-Bearing Liabilities: Policy Core Belief Revision in China’s e-CNY Reform

On 1 January 2026, China reclassified e-CNY balances held in commercial-bank wallets as interest-bearing liabilities, ending more than a decade of exclusive M0 positioning. This reform departed from both the prevailing international approach to CBDC design and the People’s Bank of China’s own long-standing policy position. How and why did China’s monetary authorities revise a policy core belief they had defended for more than a decade? This article applies the Advocacy Coalition Framework to China’s e-CNY policy subsystem. Drawing on qualitative document analysis of official speeches, white papers, and policy documents from 2014 to 2026, it argues that the reform resulted from the convergence of two policy-oriented learning mechanisms: within-coalition learning from accumulated implementation experience and cross-coalition learning through engagement with a competing minority coalition. Together, these learning processes led the Dominant Coalition to revise its policy core belief regarding the monetary positioning of the e-CNY and the institutional role of commercial banks. Empirically, the article explains why China’s world-leading CBDC pilot departed from the prevailing non-interest-bearing M0 model and provides new insights into the governance of CBDC design. Theoretically, it shows how policy-oriented learning can produce policy core belief revision within a dominant coalition under a highly centralized coalition opportunity structure, without coalition replacement.