Flagship stablecoin issuer Tether will reportedly expand its fiat offering by issuing a new coin that will be backed by the offshore Chinese yuan (CNH). The plan is unlikely to sit well with China’s financial regulators.
Will there be demand?
As of now, Tether controls tokenized US Dollars and Euros. As Dovey Wan of Primitive Crypto points out, there might be not enough demand for the CNHT stablecoin given that local people will continue trading CNY for USDT.
Apart from underpinning cryptocurrency trading, the number one cryptocurrency is also used by grey-market vendors from China to transfer money back home with the help of Russian OTC desks.
Tether also started issuing its cryptocurrency on multiple Blockchains, such as Tron and EOS. In such a way, as Bloomberg suggested, the stablecoin issuer might want to obfuscate its transactions.
Wan also added that the yuan-backed stablecoin could ruffle the feathers of Chinese regulators who are known for their hawkish attitude towards crypto. The People's Bank of China is about to issue its own cryptocurrency as a response to Facebook’s Libra.
As reported by U.Today, cryptocurrency exchange Bitfinex, which is affiliated with Tether, had their jurisdictional claim denied by the New York Supreme Court. From now on, the duo will have to provide all documents that are pertinent to the ongoing investigation that is conducted by the NYAG.