- Tether stops minting CNH₮ and sets a one year deadline for all holders to redeem their tokens.
- Low trading activity and weak adoption led Tether to end support for the offshore yuan stablecoin.
- Tether shifts focus to USDT and other high demand assets in a competitive stablecoin market.
Tether has stopped supporting CNH₮, its offshore Chinese yuan stablecoin. The company ended minting on February 20. It will also close redemption support within one year. Holders must redeem their tokens before the deadline. The decision reflects a shift toward stronger products.
Tether launched CNH₮ in December 2022. The token tracked the offshore yuan, known as CNH. It aimed to give crypto traders easier yuan exposure. At launch, the company targeted Asian market demand. However, adoption stayed limited.
Trading volumes remained low across exchanges. Liquidity never reached strong levels. As a result, the token failed to build momentum. Tether reviewed its performance data over time. The company then decided to discontinue the product.
Tether Halts Minting and Sets Redemption Deadline
Tether has already stopped creating new CNH₮ tokens. Existing holders can still redeem their balances. The company set a one-year window for redemptions. It also advised users to redeem early. This timeline allows an orderly exit.
The company structured the wind-down to reduce disruption. Users have clear instructions and ample time. Tether wants to protect customer confidence. Therefore, it communicated the process in advance. The approach supports a smooth transition.
Meanwhile, USDT continues to record high daily trading volumes. Dollar-backed stablecoins show stronger global demand. Tether plans to focus on assets with deeper liquidity. CNH₮ did not meet those standards. The company adjusted its strategy accordingly.
Limited Adoption Weighed on Long-Term Viability
Stablecoins rely on active usage and strong exchange support. CNH₮ struggled to gain wide acceptance. Traders continued using existing offshore yuan channels. In addition, China advanced its own digital yuan project. These factors reduced demand for a private alternative. Scaramucci recently said that China’s digital yuan offers interest, making it more attractive for global users than US stablecoins.
The offshore yuan market already functions efficiently. Capital controls shape how CNH moves globally. Consequently, growth opportunities remained narrow. Tether tracked these structural limits. The company concluded that expansion prospects stayed weak.
Maintaining a stablecoin requires technical oversight and compliance work. Teams must monitor reserves and platform integration. CNH₮ did not generate enough activity to justify those efforts. Therefore, Tether redirected resources. The company chose to invest in stronger markets.
Competitive Stablecoin Market Drives Consolidation
The stablecoin sector has grown increasingly competitive. Only widely trusted tokens continue to expand. USDT leads the market in trading volume. Deep liquidity strengthens its position. Tether intends to build on that base. Last year, Tether USDT gained approval across multiple ADGM blockchains boosting regulated digital finance.
Regulators have increased oversight across digital asset markets. Stablecoins linked to national currencies face close review. Companies must operate carefully in this environment. As a result, issuers focus on proven products. Tether’s move reflects that discipline.
Many stablecoins have launched and later closed over recent years. Projects without strong adoption rarely survive. CNH₮ fits that pattern. The one-year redemption period protects current holders. Tether now concentrates on reinforcing its core stablecoin infrastructure.
