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).
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 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.