Tether Holdings, the firm that issues tether (USDT), has plans

to launch an offshore Chinese yuan stablecoin called CNHT.

Tether’s digital dollar presence within the crypto economy has
been massive in recent months, seeing significant demand
from China. Bitfinex shareholder Zhao Dong has explained in a
recent interview that Tether is also preparing to launch
stablecoins backed by bulk commodities like gold, rubber, and
crude oil.

Also read: ERC20 Tether Transactions Flip Their Omni

Equivalent

Tether Dominance in the East and Plans for a Digital Yuan Called CNHT

Bitfinex shareholder and over-the-counter (OTC) trader Zhao Dong

has revealed that Tether is planning to launch a cryptocurrency
backed by the Chinese renminbi. Tether has captured a market
capitalization of over $4 billion to date. When the project first
launched in beta in November 2014, the company said the flagship
tether tokens would eventually represent three currencies:
“UStether (US+) for United States dollars, Eurotether (EU+) for
euros and Yentether (JP+) for Japanese yen.”

Tether (USDT) is the most dominant stablecoin and accounts for the majority of
cryptocurrency trades.

A great example of tether’s prevalence can be seen this week as

most of the top 10 cryptocurrencies have dropped below their 200-
day averages. Today, tether accounts for more than 75% of
all BTC trades, 49% of ETH swaps, 40% for XRP, and 57% of
all BCH trades. In July, cryptocurrency reporter Anna
Baydakova discussed the demand for tether (USDT) with Chinese
importers in Russia. According to Baydakova, the importers claim to
be purchasing $30 million a day of tethers and between the Russian
and Chinese border, USDT is the king of cryptos. The report
detailed that prior to 2018, BTC was used by the importers, but
since then they have switched over to utilizing the stablecoin.

“According to several Moscow OTC traders, it has at least one real-

world use case – as the go-to remittance service for local Chinese
importers,” Baydakova wrote at the end of July.

Not too long after Baydakova’s report on August 21, Zhao Dong
discussed the possibility of a Tether product that represented an
offshore yuan called CNHT. The prominent Bitfinex
investor revealed the plan on the Chinese messenger and social
media platform Wechat. Zhao Dong also claimed that when the
stablecoin launches, his OTC business Renrenbit will support the
newly minted CNHT. “Personally, I think the offshore yuan
stablecoin could boost the circulation of offshore renminbi and
internationalize it. Regulators may be happy to see it proceed and
succeed,” he said on Wechat. Zhao Dong also told the publication
Chainnews the same information in regard to Tether launching a
digital renminbi.

On August 21, Zhao Dong said that Tether Holdings Limited is planning to issue a digital
yuan.
 Tether’s Multi-Chain Operation

The news follows the recent migration of tethers from Omni Layer to
the Ethereum chain. Over the last week, ERC20-based tether
transactions flippedtheir Omni equivalent and last month tether
users paid $260,000 in ETH gas to push the ERC20 versions. On
Thursday, there were 100,000 ERC20 tether transactions compared
to the 39,000 Omni tether transactions. The Chinese yuan-backed
tethers won’t be the company’s first time issuing another fiat
stablecoin after the USD version. In August 2016, the firm
started issuing euro-based tethers via Omni called EURT. At the
time, the euro versions were traded on Omnidex against USDT and
on other exchanges like Openledger and Coinsbank. Just
like USDT’s current migration from Omni to Ethereum, Tether
Holdings moved the EURT project to the Ethereum chain in January
2018. “Following the widespread success of our Bitcoin-based USD
tether, issued via the Omni Layer Protocol, we have launched and
issued both US Dollars and Euros as Ethereum-based Tether,
compatible with the ERC20 standard,” the website tether.to
explained.

Tether is the sixth largest crypto market by capitalization. Check out charts and data on tether
(USDT) here at markets.Bitcoin.com. You can also easily buy Bitcoin with a credit
card. Visit our Purchase Bitcoin page where you can buy BCH and BTCsecurely, and keep
your coins secure by storing them in our free Bitcoin mobile wallet.

The reason for the change over to the ERC20 standard was
attributed to “much lower network transaction fees and much faster
confirmation times (15-30 seconds) compared with tether on Omni.”
As far as USD-backed tethers are concerned, there’s roughly 2.5
billion USDT on the Omni network and 1.5 billion USDT that use the
Ethereum network. Additionally, between the EOSand Tron
networks, there’s $350 million USDT circulating on both chains.
Tether has also revealed USDT will be hosted on the Algorand
platform and rumor has it tethers will also be used on Blockstream’s
Liquid protocol. Today there’s approximately
4,008,269,411 USDT in existence and $15.42 billion in global trade
volume. Tethers are currently the most traded cryptocurrency by
volume worldwide.

Bulk Commodity Tethers and the PBOC Digital Renminbi

The expansion of Tether migrating coins from Omni to Ethereum,

the continued issuance of tethers, and the current demand for the
stablecoin is all happening while the New York Attorney General
(NYAG) investigates the company. The NYAG office accused
Tether and Bitfinex of losing millions of dollars worth of commingled
corporate and customer funds. Ifinex, the two firms’ parent
company, has called the allegations “misleading” and “inaccurate.”
The crypto-based company also attempted to get the case
discharged on the grounds of jurisdictional overreach, but so far
Ifinex hasn’t been successful. Besides fiat-based tethers, the
company is discussing the possibility of minting coins backed by
bulk commodities according to a Bitkan interview with Zhao Dong.
Tethers could be backed by commodities like gold, crude oil, and
rubber the Bitfinex investor and Renrenbit founder said.

A few days after disclosing the digital yuan tether concept, Zhao Dong said that Tether
Holdings Limited is planning to issue tethers backed by bulk commodities like gold, crude
oil, and rubber.

In the midst of Zhao Dong revealing the concept of bulk commodity

backed tethers and an offshore digital renminbi, a senior official at
the People’s Bank of China (PBOC) disclosed that the country’s
state-backed cryptocurrency was “close to being out.” The PBOC
coin could pose a problem for Tether if the Chinese government
whimsically decides to ban the use of any fiat-backed tethers.
Tethers may meet the same fate BTC saw in 2017, when the
central bank and financial regulators put a stop to exchanges
trading BTCagainst the yuan. Deputy director of the PBOC Mu
Changchun told the press that the state-operated crypto was
coming soon and said the offering would be a two-tier system. The
first system the cryptocurrency will use will be tied to the central
bank and the subset of smaller financial institutions below the
PBOC. The second tier will be comprised of a system that
distributes the digital yuan to the retail market. Rumor has it the
PBOC crypto might be called “Globalcoin” and the Chinese digital
fiat has a lot of similarities to Facebook’s Calibra project.

Because of the PBOC’s efforts, some digital currency proponents

believe Tether’s creation of CNHT is not a good idea and could
upset Chinese regulators. Founding partner at Primitive Crypto
Dovey Wan said: “I don’t see enough demand for CNHT and alike,
as local Chinese will still trade USDT with CNY, if it’s CNH it will be
the same as USD — Not sure what’s the material upside of having
CNHT for Tether, plus pissing off the Chinese regulator.” The
founder of cryptocurrency trading platform Lbank had the same
opinion. “This is a useless stupid effort — There’s no such demand
from local traders, neither demand from overseas. It only enables
trade between the Chinese yuan and U.S. dollar in the digital realm,
while its issuer is not a Chinese firm,” Lbank’s He Wei commented.

What do you think about Tether issuing offshore digital yuan

called CNHT? What do you think about the possibility of Tether
minting tokens that represent bulk commodities like gold and
crude oil? Let us know what you think about this subject in the
comments section below.

Image credits: Shutterstock, Pixabay, markets.Bitcoin.com,

Tether.to, and Wiki Commons.