Tether Plans To Launch A Yuan-Backed Cryptocurrency

Tether, dubbed as the gateway for buying Bitcoin, announced their plans to issue a stablecoin, backed with Chinese Yuan (CNY).

Some of the members in the management board of Tether are also shareholders of the crypto exchange Bitfinex. This is the case with Zhao Dong, who announced the creation of a new stablecoin on WeChat. Zhao states that the coin abbreviation for the new stablecoin will be CNHT. In addition, Zhao`s P2P crypto lending company, Renrenbit, will provide trading and depositing support for CNHT at its launch.

 “The issuance of such offshore stablecoin backed by Yuan would internationalize the Chinese currency and will get it to global markets,” Zhao stated in a post. According to him, the new CNHT stablecoin should launch within weeks, and the backing would be held in a Belgian bank.

Regulations, however, are still questionable, as People’s Bank of China is close to issuing their own cryptocurrency, dubbed CBDC. China’s central bank plans to digitalize the Yuan for both inland and offshore customers. The situation may lead to CNHT being rejected by Chinese authorities. Even if it receives regulatory approval, the new stablecoin might not become as popular as Tether, because almost all crypto trading platforms in China are already using Tether’s USDT.

For now, Tether did not comment on the news. It is also not clear on which blockchain the new currency would be based on. Tether initially launched on Bitcoin’s blockchain network, but later on it expanded to the Ethereum and TRON networks.

The new stablecoin is a replay from 2003, when the People’s Bank of China agreed on Hong Kong banks to provide offshore Yuan deposits, exchanging, remittance, and other financial operations.

The news comes amid investigations against Bitfinex and Tether from New York’s Attorney General (NYAG). According to the NYAG, Bitfinex illicitly borrowed an approximate $850 million from Tether to cover-up the loss of access to funds, held by a Bitfinex partner.