Tether to Discontinue Yuan Stablecoin After China’s Regulatory Warning

Key Insights

• Tether says it will sunset CNHT, its yuan-pegged stablecoin, amid a strong regulatory notice from China.
• Tether will stop minting CNHT, and redemptions will end in one year.
• The firm remains the leading stablecoin issuer with its USDT and XAUT

Stablecoin issuer Tether has disclosed plans to end support for its Chinese Yuan stablecoin CNH₮. In a blog post on February 20, the firm said it will start the transition for stablecoin.

The announcement comes less than a month after China banned unapproved Yuan-pegged stablecoins and tokenized real-world assets. The ban also extended to the issuance of overseas Yuan-pegged stablecoins.

In an official notice issued by the People’s Bank of China (PBOC) and other major regulators, the agencies banned the domestic use of stablecoins and RWA. It also included potential penalties for domestic entities that provide intermediary services to overseas firms.

The country claimed that stablecoins and tokenized RWAs pose systemic risks to its financial stability. Interestingly, it stated that government-approved RWA projects could be allowed.

Tether to Stop Issuing Yuan Stablecoin

In line with its plan to sunset the CNH₮, Tether has now said that it will immediately stop issuing new tokens. The company stated that this decision is based on the evaluation of community interest and adoption.

Defillama data shows that Tether Yuan currently has a circulating supply of 20.5 million tokens with a market cap of $2.97 million. This reflects the stablecoin’s failure to catch on since its launch in 2019.

By comparison, the Tether USDT stablecoin already has a circulating supply of around $20 million. Tether launched USAT in January 2026 as a regulatory-compliant, US dollar-pegged stablecoin for the US market.

Tether CNHT Circulating Supply. Source: Defillama

The firm itself acknowledged the minimal interest in the CNHT stablecoin, noting that it has failed to gain adoption.

It wrote:

“This decision reflects evolving market conditions, low interest in the product, and limited sustained community demand for CNH₮ relative to other supported assets. CNH₮’s usage levels don’t justify the continued operational support required to maintain it at the standards Tether applies across its products.”

Meanwhile, Tether will maintain support for 1 year, during which holders of CNHT can redeem it. The redemption period ends after a year, and the stablecoin issuer wants all token holders to redeem their tokens before the deadline.

Tether Maintains Stablecoin Dominance with USDT

Despite sunsetting the Yuan stablecoin, Tether remains the largest stablecoins issuer with USDT. The dollar-pegged token currently has a circulating supply of $182.54 billion, enough to have over 59% dominance.

Its closest competitor, Circle USDC, only has $74.5 billion. However, USDT supply has declined slightly over the past month, by 2.23%, while USDC saw less than 1% growth in that period.

Interestingly, USDT is not the only stablecoin from Tether, even though it is by far its biggest. The newly launched USAT is also seeing a slight gain, even as its adoption remains shaky in a saturated market.

However, it is the Tether gold-pegged stablecoin XAUT that is currently seeing the most growth. XAUT, which saw its market cap double in 2025, has continued to soar thanks to gold’s performance and increased adoption. It now has a market cap of $2.65 billion based on the current circulating supply.

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