- Offshore Chinese Yuan Tether (CNHT) will be available for users to trade, acquire, and hold Tron blocks.
- After the FTX episode, Tether has once again faced questions about its reserves.
Stablecoin-issuer Tether has made quite a bold move recently by issuing Chinese Yuan (CNHT) offshore on the Tron blockchain. Bitfinex will be the first crypto exchange to allow users to store and withdraw CNH₮ via the Tron blockchain transport layer.
Tether first established a CNH₮ stablecoin in 2019 by pegging it to the offshore Chinese Yuan. It was initially only available as an ERC-20 token on the Ethereum blockchain network. With the new development, Tron will become the second blockchain to host CNH₮ to trade, own, and hold the stablecoin.
CNH₮ will now be the fourth stablecoin backed by Tether in addition to the US Dollar (USD₮), the Euro (EUR₮), and the Peso (MXN₮). Speaking about the development, Paolo Ardoino, CTO of Tether said:
We are excited to bring CNH₮ to the Tron ecosystem. At a time when the crypto market is in great turmoil, we believe that the best way forward is to keep building. Things are business as usual at Tether and hopefully its continued growth and expansion will inspire others to keep going.
Launching Chinese Yuan CNH₮ offshore on the Tron blockchain may help improve the usability of the stablecoin.
Risks Around Tether And Reserves
With the collapse of the crypto exchange FTX last month, stablecoin issuer Tether is once again on the docks where USDT reserves are being questioned. In the past, the question has arisen where Tether keeps its reserves.
The recent collapse of FTX has once again raised the curiosity of whether Tether can handle the massive demand for liquidity if necessary. Questions have also arisen about the lending and borrowing facilities offered by Tether.
Tether has clarified that the loan feature is only available to eligible customers who must provide sufficient liquidity collateral that Tether can convert to fiat in the event of default. By the end of the September quarter, Tether’s loans had reached $6.1 billion, which is 9 percent of the company’s net assets. By the end of 2021, the loan will be $4.1 billion, or 5 percent of Tether’s total assets.
Tether has also faced accusations of printing stablecoins out of thin air several times, in order to influence the crypto market. Tether founder Reeve Collins denied the claim and added that proof of backup for the stablecoin was posted on its official website. He is more said:
I sold the company at the end of 2015, and the principle continues and in my opinion, to the best of my ability, [along]with the best risk mitigation tactics in the industry. It has stood the test of time.
