TL;DR
- Tether stopped minting CNHT immediately and will allow redemptions for one year before fully shutting down its offshore yuan stablecoin, citing low demand and limited adoption.
- The wind-down reinforces dollar dominance in crypto, where USD stablecoins anchor most trading pairs, liquidity pools, and settlement flows.
- Tightening oversight, regulatory ambiguity, and capital-control constraints in China limit space for private RMB-linked tokens, while the state advances its e-CNY strategy.
Tether has begun discontinuing its offshore yuan stablecoin, CNHT, marking the end of a product that struggled to gain meaningful traction. Tether’s yuan stablecoin was designed to track the value of the offshore yuan CNH. New issuance has stopped immediately, while redemption will continue for one year before full shutdown. Tether cited low demand and limited adoption as the primary reasons for the token’s phase out. Circulation remained limited compared to dollar-pegged tokens. As a result, the discontinuation should have minimal impact on overall crypto liquidity. Its wind-down highlights structural realities of the stablecoin market rather than triggering any broader market disruption.
What the CNHT Stablecoin Represented
The CNHT stablecoin was a yuan-pegged stablecoin linked specifically to offshore yuan CNH rather than onshore CNY. The distinction matters because CNY trades within mainland China under capital controls, while CNH trades in offshore markets such as Hong Kong.
Tether launched CNH₮ in 2019 to provide easier yuan exposure for crypto traders, with support on Tron added in 2022. Demand never took off relative to expectations, and market depth remained limited.
Understanding CNY vs CNH is central to assessing the product. CNH exists to facilitate international use of the renminbi without fully liberalizing China’s domestic capital account. The offshore yuan stablecoin structure allowed blockchain-based exposure to CNH without accessing China’s domestic banking system.
Despite that design, adoption remained limited. Exchange trading pairs were concentrated, and there was little integration into major DeFi protocols. Compared with USD stablecoin dominance across trading venues, CNHT’s footprint was small.
Dollar Dominance in Crypto Markets
The discontinuation of CNHT reinforces the broader pattern of dollar dominance in crypto. Most trading pairs on centralized exchanges are settled against dollar-pegged assets. Liquidity pools in decentralized finance are also largely denominated in U.S. dollar equivalents.
USD stablecoin dominance is not only a function of market preference. It is embedded in exchange infrastructure, derivatives markets, and collateral frameworks. Across major venues, USD stablecoins account for the vast majority of stablecoin trading volume, consistent with the prevailing stablecoin market structure. As a result, non-USD stablecoins face structural barriers to scaling.
Non-USD stablecoins must overcome network effects that favor dollar liquidity. Market makers, arbitrage desks, and institutional desks typically operate within dollar settlement systems. That environment limits the natural demand for alternatives such as yuan-pegged instruments.
In this context, the Tether offshore yuan stablecoin operated within a market architecture built around dollar-based rails.
China’s Stablecoin Regulation and Monetary Control
Recent developments in China’s stablecoin regulation have shaped the operating environment for renminbi-linked digital assets. Authorities have tightened oversight, while regulatory ambiguity and capital-control constraints continue to limit the scope for RMB-pegged stablecoins, including activity connected to offshore markets.
This regulatory backdrop intersects with broader objectives of internationalizing the yuan. China seeks greater global use of its currency while maintaining capital controls. That balance creates structural constraints for privately issued digital tokens linked to the renminbi. It pushes issuers toward dollar-linked rails where market infrastructure is deeper and regulatory clarity is stronger.
The e-CNY strategy represents a separate policy track. The digital yuan is a central bank digital currency. The People’s Bank of China issues and operates the digital currency within its state-controlled monetary framework. Unlike private stablecoins, it constitutes sovereign digital fiat rather than a privately collateralized token.
RMB stablecoin policy, therefore, emphasizes oversight and boundary-setting, while the e-CNY strategy advances state-managed digital currency infrastructure. Together, these approaches limit the operating space for privately issued offshore yuan instruments.
>>> Related: China Crypto Crackdown: What Changed
Implications for Non-USD Stablecoins
The CNHT stablecoin wind-down is not a market shock. However, it illustrates how stablecoin market structure reinforces existing currency hierarchies.
Non-USD stablecoins continue to face liquidity constraints. Even where technical issuance is possible, sustained demand requires integration across exchanges, derivatives venues, and settlement corridors. Dollar dominance in crypto remains the defining feature of the sector’s monetary layer. Until alternative currencies achieve comparable network depth, dollar-linked tokens are likely to remain central to trading and settlement.
The discontinuation of Tether’s offshore yuan stablecoin, therefore, reflects structural conditions rather than a short-term event. It underscores how currency architecture, regulation, and liquidity dynamics shape the evolution of digital assets.
