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Digital Currency/Stablecoin/Tokenization Series: Tether Intends For Stablecoin Pegged to Chinese Currency But Acceptance Seems Unlikely
Despite the fact that USDT faced some apprehensions of price turbulence and transparency issues, predominant volumes traded have been from Tether, and it remains technically superior with the highest liquidity, and smallest spreads.
For now, as an expansion plan, Tether appears to be intending to issue a stablecoin pegged to the off-shore Chinese Yuan. Dong Zhao, a shareholder of Tether’s sister company Bitfinex, told ChainNews on Wednesday that CNHT will be launched “in the near future.”
This comes at a time when the Chinese Government authorities are working on the ‘Digital Renminbi’ themselves as the U.S. Department of Treasury affirmed China as a ‘Currency Manipulator’.
Chinese yuan (CNY) has constantly been depreciating and CNY has dropped in the past after the PBoC fixed the USDCNY very close to 7.00 (actual: 6.9996) handle, reflecting the cautious mood among market investors.
In the meantime, the PBoC issued a statement in a response to the US' labelling China as "currency manipulator". The Chinese central bank defended that the CNY depreciation is largely due to change of market conditions, and blamed that the US accusations are groundless. While they made an announcement of approval from the state administrative authority to start working on a national digital currency in order to combat the uncertainty of Libra, as per the Chinese reports.
On the flips side, some crypto-veterans perceive that Tether’s plans are most unlikely to get well-come by the Chinese authorities.
A crypto-analyst Dovey Wan says that the demand for CNHT might not be as high as USDT. He stated that “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.”