Tether Is Expected To Release Yuan Stablecoin
CryptoBit News Today2 min read
Tether, the company behind the USDT stablecoin, is moving forward with issuing a new stablecoin pegged to the Chinese yuan. According to Zhao Dong, a major over-the-counter (OTC) trader in China and shareholder of Tether's sister company Bitfinex, the new stablecoin will be named CNHT. This potential new stablecoin comes as Tether continues to be embroiled in regulatory scrutiny and controversy over its USDT stablecoin.
New Yuan-Based Stablecoin in the Works from Tether
On Wednesday, Zhao Dong told ChainNews that CNHT would debut "in the near future," having earlier revealed on WeChat that Tether intended to name the token CNHT. His peer-to-peer lending platform, RenrenBit, will be the first investor in the stablecoin and will handle deposits and trading for it once it launches.
The move by Tether comes as the Hong Kong Monetary Authority reports that as of June 2019, offshore yuan (CNH) customer deposits amounted to 604 billion yuan ($85 billion). China continues to enforce an annual foreign exchange limit of $50,000 or its equivalent on individual citizens. Tether's new stablecoin would likely facilitate increased circulation of renminbi offshore. Zhao stated that the new asset would reduce Tether's reliance on the U.S. dollar for its stablecoin business.
In April 2019, the New York Attorney General's Office alleged that Bitfinex and Tether misappropriated customer funds to conceal $850 million in company losses. On Monday, the New York Supreme Court rejected assertions from Bitfinex and Tether that the NYAG lacked jurisdiction, ordering the firms to cooperate with the probe.
Despite being called CNYX, tokens are actually pegged to the onshore yuan (CNY). By contrast, Tether plans for CNHT to be backed by offshore yuan, with its reserve anticipated to be held in a Belgian bank.
Prominent Chinese fund manager Dovey Wan cast doubt on the utility of the planned token. Chinese fund manager Dovey Wan tweeted that she saw little use for such a token, predicting that Chinese traders would still prefer the USD-denominated variety. Wan also conveyed her concern that this move could draw regulatory attention, taking note of China's plan to debut a yuan-backed digital currency.
If and when it launches, CNHT will be Tether's fourth stablecoin alongside USDT, euro (EURT), and Japanese yen (JPYT). Two-thirds of all bitcoin trading volumes are conducted using USDT, according to data from CryptoCompare.
