Tether launches Chinese Yuan (CNHT) on TRON blockchain to target 1.6 billion people in the market

by Arthur · December 7, 2022

Tether’s offshore Chinese Yuan (CNHT) will be available for users to trade, acquire and hold on the Tron blockchain.
After the FTX episode, Tether has again faced questions about its reserves.

Stablecoin issuer Tether has made a rather bold move recently by issuing its offshore Chinese Yuan (CNHT) on the Tron blockchain network. Bitfinex will be the first crypto exchange to allow users to deposit and withdraw CNH₮ via the Tron blockchain transport layer.

Tether first founded the CNH₮ stablecoin back in 2019 by pegging it to an offshore Chinese yuan. It was initially only available as an ERC-20 token on the Ethereum blockchain network. With the latest development, Tron will be the second blockchain network to host CNH₮ enabling the stablecoin to be traded, acquired and held.

CNH₮ will now be the fourth stablecoin backed by Tether in addition to the US Dollar (USD₮), Euro (EUR₮) and Peso (MXN₮). Paolo Ardoino, CTO of Tether, spoke about the development:

We are excited to bring CNH₮ to the Tron ecosystem. At a time when the crypto market is experiencing tremendous turmoil, we believe the best way forward is to keep building. Things are business as usual at Tether, and we hope our continued growth and expansion will inspire others to continue as well.

Launching the offshore Chinese Yuan CNH₮ on the Tron blockchain network could also help increase the usability of the stablecoin.

The risk surrounding Tether and its reserves

With the collapse of crypto exchange FTX last month, stablecoin issuer Tether was once again on the docket for questioning over its USDT reserves. In the past, questions have arisen about where Tether keeps its reserves.

The recent FTX collapse has once again raised curiosity about whether Tether can handle the massive liquidity demand if necessary. Questions have also arisen about the loans and loan facilities that Tether offers.

Tether has specified that the loan function is only available to qualified customers who need to set up enough liquidity security that Tether can convert to fiat in the event of default. By the end of the September quarter, Tether’s loans had reached $6.1 billion, which is 9 percent of the firm’s net assets. By the end of 2021, these loans were $4.1 billion, or 5 percent of Tether’s total assets.

Tether has also faced allegations of minting stablecoins out of thin air multiple times to influence the crypto markets. Tether co-founder Reeve Collins refuted these claims, adding that proof-of-reserves for their stablecoins were posted on the official website. He further so:

I sold the company at the end of 2015 and the principles continue to work and in my opinion, to the best of my ability, [along]with the best risk mitigation tactics in the industry. It has withstood the test of time.