Tether Announces Shutdown of CNH₮ Offshore Chinese Yuan Stablecoin
The largest stablecoin issuer, Tether, announced that the company will discontinue all support for its offshore Chinese Yuan-pegged Stablecoin CNH₮. The company has already stopped minting new CNH₮ tokens and will completely stop any form of assistance within the next year.
Highlights
- Tether stated that it will stop minting CNH₮: redemption support will only continue for another year.
- The company decided to discontinue due to CNH₮’s low demand and adoption, as the token is difficult to maintain.
About CNH₮
CNH₮ is a stablecoin pegged 1:1 to the offshore Chinese yuan (CNH), issued by Tether to facilitate digital, on-chain exposure to the currency for trading, payments, and hedging. It was launched on the Ethereum blockchain as an ERC-20 token. CNH₮ was launched in 2019. It operated on Ethereum and Tron.
Why did Tether decide to stop minting CNH₮?
According to an announcement on February 20, Tether stated that it will stop its offshore Chinese yuan-pegged stablecoin CNH₮. The decision was made due to the low adoption rate. Its overall usage levels and trading volumes significantly dropped compared to other Tether products like USD₮. Tether stated that it continuously reviews its product offerings and adjusts according to real-world market usage. CNH₮’s overall capability did not advance as initially thought. Therefore, it did not fit into the company’s long-term plans.
So, Tether has chosen to focus on markets that have stronger adoption and higher growth prospects.
CNH₮ Shutdown in Phases
The company said the shutdown will be executed in two phases, in a structured, transparent process, similar to prior product shutdowns.
Firstly, Tether will immediately discontinue issuing new CNH₮ tokens, and then no new tokens will be available for minting. Secondly, the company stated that redemption support for CNH₮ will continue for a year from the announcement date. It gives holders time to redeem their tokens. A separate reminder notice will be issued ahead of the redemption deadline.
The company has urged its users to redeem their CNH₮ tokens as soon as possible.
Tether Focusing on Strengthening USDT and Its Core Infrastructure
Tether also announced that it is now focused on developing its stablecoin ecosystem. USDT will remain the market leader, with higher trading volumes on a daily basis.
Tether wrote, “Our priority is to allocate resources where they can most effectively enhance security, reliability, and innovation across the digital asset landscape.”
Instead of focusing on creating products with low adoption, Tether will concentrate on enhancing stablecoin infrastructure and creating new products that are useful and suitable for its global markets.
The decision to shut down CNH₮ signals the evolving landscape of the stablecoin market. It also indicates high demand for mature and more competitive products. Stablecoins that do not get adopted will phase out, while prominent ones, such as USDT, will continue to strengthen their base.
Among numerous stablecoins, USDT remains the dominant one with a market cap of $183 million and a 24-hour trading volume of $80.16 billion. Moreover, apart from USD₮, its resources are now allocated to new initiatives, such as the regulated US dollar-pegged stablecoin USA₮.
Final Thoughts
As stablecoins like USD₮ gain momentum in emerging markets, companies focus on allocating resources to enhance their usability, security, and improve the overall digital landscape. So, assets that do not gain traction will eventually be left out.