Tether releases new stablecoin pegged to Chinese yuan

Tether, the controversial stablecoin issuer behind USDT, today announced the launch of a new stablecoin that will be backed by offshore Chinese yuan (CNH).

The stablecoin, CNHT, will be pegged to the yuan on run on the Ethereum blockchain as an ERC-20 token, according to a statement from the company. Tether can now receive wire transfers of CNH at tether.to, which, in theory, increases its ability to facilitate “the digital use of fiat currencies.” The Tether platform also supports the U.S. dollar (USDT) and the euro (EURT).

Launched in 2014, Tether remains the primary stablecoin on the market, but has more recently faced competitors in USD Coin (USDC), Anchor and other similar tokens. As a fiat-pegged stablecoin, Tether is supposedly backed by traditional fiat currency held in reserves, which sets it apart from other forms of digital currency such as Bitcoin, Ethereum and Ripple’s XRP.

This claim, however, has been repeatedly challenged, and is central to the ongoing legal battle that Tether’s parent company, iFinex, faces in New York. The New York State Attorney General filed a lawsuit against iFinex in April alleging that the company committed fraud and violated securities laws when its crypto exchange, Bitfinex, raided Tether reserves to cover the loss of $850 million to a shady Panama-based, payment processor called Crypto Capital. 

Even before the lawsuit, however, allegations arose that Tether was being used to manipulate the price of Bitcoin. A report issued by University of Texas Finance Professor John Griffin in mid-2018 claimed to demonstrate how the stablecoin was used to do precisely that during Bitcoin’s meteoric rise in December 2017.

But even with the eyes of U.S. regulators firmly on Tether’s business practices, the company evidently has no concern with entering a new market in China.