Tether Launches CNHT, a new Offshore Chinese Yuan (CNH) Supporting Stablecoin

On September 10th 2019, Tether, the Hong Kong Cryptocurrency Company announced that they had launched a new stable coin(CNHT). 

The stablecoin is set to support offshore Chinese Yuan (CHN) as a way of embracing the use of traditional currencies on a digital platform and attract Chinese traders.

The new CNHT stablecoin will initially be available to trade as an ERC-20 token on Ethereum blockchain. CNHT is yet another addition to Tether’s basket of supported currencies like US dollar (USDT), Japanese Yen (JPYT), and the Euro (EURT).

CNHT’s Significance to Chinese Traders

Tether is way ahead of the Chinese central bank with the release of a digital currency pegged to the Chinese Yuan. CNHT will cater to the rising demand for digital currency in China.

A report by Bloomberg last month showed that there had been a steady rise in demand for cryptocurrencies like Tether in China. This is because cryptocurrencies like Bitcoin have become a safer trading platform, especially with the ongoing trade wars between china US that has weakened the Chinese Yuan.  

Bitcoin, which was reported to be moving further in the opposite direction to the traditional Chinese currency, reached a record inverse relationship in August. London’s School of Economics Researcher, DR. Garrick Hileman said:

“There’s corroborating evidence for this, on that, people in Asia were paying more for bitcoin than elsewhere when the Yuan fell. You can see it in the premium price paid sometimes for Bitcoin exchanges like Huobi that primarily cater to Chinese.”

Tether – Stablecoins Regulatory Challenges

In the US market, Tether is grappling with US financial regulators due to USDT. The stable coin is popular with Chinese traders who heavily use it to evade tax restrictions and government controls.

CNHT might be Tether’s solution to make obsolete the use of traditional currency while trading cryptocurrencies. However, Chinese financial regulations are tight on all cryptocurrencies, and CNHT is bound to attract their attention.  

In November, the Chinese government, through their central bank plans to launch its own Cryptocurrency. The move is expected to enable Beijing to gain more control over its financial system and limit the power of popular tokens that seek to promote distributed financial power.