Cryptocurrency creator Tether, known for producing tokens pegged to major currencies, is issuing a stablecoin backed by China’s yuan.

According to CoinDesk, the CNH₮ coin will be tied to offshore yuan and could help increase the utilization of fiat currency.

Tether Stablecoin Tied to Yuan and Powered by Ethereum Blockchain

The addition of offshore Chinese Yuan by Tether and its introduction of CNH₮ was announced in a short blog post on its official website. 

In the post, the group wrote, “We are pleased to announce the addition of offshore Chinese yuan (CNH) to our basket of supported currencies, and the launch of a new stablecoin, CNH₮.”

“CNH represents a further expansion of Tether’s capabilities in facilitating the digital use of traditional currencies, such as US dollar (USDT) and euro (EURT),” Tether said, referencing its existing stablecoins. 

While collateralized to China’s yuan, the stablecoin will be an ERC-20 token run on the Ethereum blockchain network. The blog post ended with an invitation to interested exchanges looking to feature the coin along with a link to additional information.

Stablecoin Could Increase Circulation of Yuan

Stablecoins are a digital relative to stable assets, sharing their resistance to volatility and offering similar benefits in terms of usage based on predictable values. 

The CoinDesk article noted that Zhao Dong, over-the-counter (OTC) trader and shareholder in Tether affiliate exchange Bitfinex, had earlier voiced the belief that a stablecoin pegged to the yuan would help increase its circulation beyond China.  

The trader indicated further support for a coin such as CNH₮, telling CoinDesk that his company Renrenbit would support a stablecoin tied to the yuan. 

Source: www.coindesk.com

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