Tether launches stablecoin tied to offshore yuan

10 Sep 2019

Stablecoin company Tether has announce it is launching a new stablecoin tied to the offshore Chinese yuan.

As per an announcement made by Tether on Monday, the so-called Tether CNHT is pegged to the offshore yuan, available as an ERC-20 token on the Ethereum blockchain and is a further expansion of the company’s capabilities in “facilitating the digital use of traditional currencies.”

This latest currency joins Tether’s other stablecoins backed by U.S. dollars and the euro.

According to a Coin Telegraph report, the company plans to launch a stablecoin backed by a basket of commodities such as gold, crude oil and rubber.

Zhao Dong, a shareholder in sister company Bitfinex stated the idea of issuing a coin pegged to commodities was being looked into in order to sidestep the associated risks with keeping large amounts of reserve funds in banks.

Prior to this announcement, Dong commented last week on the ongoing controversy in relation to Tether’s flagship USD-pegged stablecoin and the allegations it is not backed 1:1 by the dollar: “Tether is fully backed by reserves, out of 4 billion existing USDT about 3.35 billion are now in securities and 650 million are being lent to Bitfinex. Bitfinex has been raising 1 billion with its LEO token IEO and could easily pay back Tether any time (as a matter of fact it already paid 100 million last month).”

He went on to say: “Even if you don't calculate this 650 million as reserves the total amount backed by USD is 83.75% (3,350/4000) and not 72% as fake news are reporting.”

Hong Kong-based Tether has beaten China’s central bank in launching a yuan-pegged digital currency. It was recently reported the central bank has increased research and development into digital fiat currency, which may be ready for launch in November, says a Technode report.