Currently, Tether issues three stablecoins pegged to the euro (EURT), Japanese yen (JPYT) and the United States dollar (USDT). ChainNews, a Chinese news outlet, reported that Tether Limited is planning to add a new member to its stablecoins collection with CNHT. This new stablecoin will be pegged to the Chinese currency Renminbi held in offshore accounts.
Zhao Dong, a shareholder at Bitfinex cryptocurrency exchange told the news outlet that Tether will start issuing CNHT stablecoin in the near future with the stablecoin’s reserve being secured in a Belgian bank. He went on to say that RenrenBit, his lending firm, would pioneer investing in the upcoming stablecoin project.
“Personally, I think the offshore yuan stablecoin could boost the circulation of offshore renminbi and internationalize it. Regulators may be happy to see it proceed and succeed.”
It’s worth noting that Tether has not issued an official statement regarding this news yet. Therefore, it is still unknown which blockchain(s) will support the new stablecoin keeping in mind that Tether’s USDT is built on top of Bitcoin, Tron and Ethereum blockchains.
Will This New Project Flourish In The Chinese Market?
As we reported, the Chinese government claims their central bank-backed digital currency is ready to be rolled out. This digital currency will probably work as the digital yuan both domestically and offshore. Therefore, Tether may encounter some hurdles when trying to acquire approval for this stablecoin in China.
Then let’s say Tether gets the necessary approval for the Chinese yuan pegged stablecoin. Another obstacle would be popularizing it in China owing to the fact that presently most cryptocurrency trading platforms in China support USDT, US dollar-pegged stablecoin.
According to a screenshot provided by Chinese markets analyst and founding partner at Primitive Crypto Dovey Wan, Zhao says that this project might not sit well with Chinese regulators and it might also not gain traction like USDT. He noted:
“Hope this won’t destroy Tether. I don’t think that CHNT will be in sufficient demand as local residents continue to exchange USDT for Yuan.
Tether’s Legal Woes Continue
In spite of being the largest stablecoin provider, Tether has an unfaltering legal battle with the New York Attorney General (NYAG). Tether and its sister company Bitfinex are currently being investigated for allegedly covering up a loss of $850 million that Tether lent Bitfinex.
Yesterday, Tether and Bitfinex issued a similar response after the presiding judge Joel Cohen denied their motion to dismiss the case claiming that NYAG lacks the jurisdiction to investigate the case. According to this response, Tether and Bitfinex plan on appealing this decision.