Tether is planning to issue a stablecoin tied to the yuan, Chinese currency. According to Zhao Dong, counter trader in China and shareholder of Bitfinex – who shares managers and owners with Tether – , the latter intends to name the stablecoin CNHT.
Zhao believes that the new stablecoin will be launched very soon, possibly within weeks. He also stated to the CoinDesk that the stablecoin reserve should be held at a bank in Belgium.
According to the source, RenrenBit, crypto loan business P2P, will support the negotiation and deposits of the CNHT when it is launched.
“Personally, I think the stablecoin of yuan overseas could increase the circulation of the yuan abroad and internationalize it. Regulators can be happy to see it moves on and succeed”.
For him, the token would have two major benefits. One would be the fact of making the Tether less dependent on the US dollar for its stablecoin business. In addition, it would also increase the circulation of yuan kept abroad.
Zhao also said he did not know if the Tether has buyers lined up for the new stablecoin. It is also unclear in which blockchain the CNHT would be built. Tether’s USDT was issued over the bitcoin blockchain, as well as the Ethereum and Tron networks.
The Tether, best known for issuing the USDT pegged to the dollar, did not respond to the statements.
Yuan Offshore market
The Chinese yuan was traditionally just a domestic currency, but that changed in 2003. At the time, the People’s Bank of China has signed agreements that allow banks in Hong Kong to provide deposits, remittances, exchanges and other services of yuan overseas, according to the South China Morning Post.
In doing so, the yuan offshore market took off. As a result, Hong Kong became one of the largest yuan hubs abroad, possessing up to 604 billion yuan (US$ 85 billion) in customers’ deposits from June 2019. The data is extracted from the Hong Kong Monetary Authority.
However, China still imposes a limit on the annual exchange volume of a citizen at US $50,000 or an equivalent value in other foreign currencies.
In Brazil, the BRZ gives Brazilians access to the international market
The movement being done by Tether follows a trend of the international market for launching stablecoins. The BRZ, for example, the main stablecoin pegged to Brazilian real, was launched to allow Brazilians to access the world cryptocurrency market without exposing themselves to the volatility of the bitcoin. The Maker intends to release versions of the DAI pegged to other national currencies different from the dollar.