Bitfinex shareholder Zhao Dong informed the outlet that Tether – the stablecoin operator behind USDT – plans to issue a new stablecoin in the near future. It would be backed by Chinese yuan held in offshore accounts under the CNHT ticker.
Stablecoin operator Tether plans to issue a Chinese yuan-backed stablecoin, local industry media ChainNews reports on Aug. 21.
Zhao also reportedly said that his digital asset management platform RenrenBit would be the first to invest in the project. He also pointed out that Tether and cryptocurrency exchange Bitfinex are in a side-by-side relationship and that they have the same management team.
Tether to issue a renminbi-pegged stablecoin
Tether has not replied to Cointelegraph’s request for an official confirmation at the time of publication.
A controversial partnership
The relationship between Bitfinex and Tether roused suspicions after the New York Attorney General’s office filed a complaint against iFinex, Bitfinex and Tether in April. Prosecutors alleged that the companies defrauded New York investors by covering up an $850 million loss on the Bitfinex trading platform.
As Cointelegraph reported earlier, Bitfinex and Tether have replied to Judge Joel Cohen’s recent ruling ongoing case, maintaining that the allegations are meritless.
Tether Launches New Stablecoin Pegged to Offshore Chinese Yuan
Stablecoin firm Tether announced the launch of a new stablecoin tied to the offshore Chinese yuan dubbed CNHT.
According to an announcement on Sept. 9, Tether CNHT is pegged to the offshore yuan and available as an ERC-20 token on the Ethereum blockchain. The new currency joins Tether’s other stablecoins backed by U.S. dollars (USDT) and euro (EURT).
What is the offshore Yuan?
China’s national currency is officially called the renminbi. The currency’s unit is called the yuan, of which there are two kinds: offshore and onshore.
The main difference between the two is that the offshore yuan can be traded freely on foreign currency markets, while onshore yuan trading is tightly controlled by the Chinese central bank, the People’s Bank of China. As such, the offshore yuan is free from the monetary policies set forth in Beijing.
Tether considers commodity-backed stablecoin
As Cointelegraph recently reported, Tether plans to release a stablecoin backed by a basket of commodities such as gold, crude oil and rubber. Zhao Dong, a shareholder of sister firm and crypto exchange Bitfinex, said that the idea of issuing a coin pegged to commodities was being considered in order to mitigate the risks associated with keeping large amounts of reserve funds deposited in banks.
Tether Launches Gold-Backed Stablecoin and Begins Trading on Bitfinex
Tether is now supporting a gold-backed stablecoin, Tether Gold (XAU₮), according to a Jan. 23 press release. One token represents ownership of one troy fine ounce of physical gold, currently worth approximately $1,550.
The new product is available as an ERC-20 token on the Ethereum blockchain, as well as a TRC20 token on Tron (TRX).
The funds are said to be backed by physical gold held in a “Switzerland vault”, the press release reads. According to Tether, its gold offering is the only product among its competition that does not charge custody fees.
Tether has also invited all exchanges wishing to support the new token to contact the company. Blockchain information for the Ethereum contract shows that there is currently an outstanding supply of almost 4,000 tokens, which would be equivalent to a $6.2 million market capitalization.
Bitfinex has already launched XAUT trading, with one quarter of the ERC-20 supply having been moved to Bitfinex. As a closely-affiliated company to Tether, it was expected for Bitfinex to be the first to offer the new token.
Plans for commodity-backed Tethers were in full swing since at least September 2019.
Tether has often been criticized for its opaque reserve management, with one high-profile class action lawsuit alleging that the company used this to manipulate the market in 2017.
In addition, Bitfinex reportedly used Tether reserves to cover a liquidity shortfall following issues with its payment provider, Crypto Capital Corp.