- Tether announced that it will stop minting CNH₮; redemption support continues for one year.
- The decision was taken because of CNH₮’s low demand and adoption, as the token became difficult to maintain.
The largest stablecoin issuer, Tether, has said that it decided not to support its offshore Chinese Yuan-pegged Stablecoin CNH₮ because of the weaker demand compared with its other stablecoin products and tighter regulatory pressures.
According to the announcement on February 20, Tether said that it will follow a structured, transparent process, which is similar to the prior product shutdown, as it will proceed in two phases.
Firstly, Tether will immediately stop issuing new CNH₮ tokens, and then, no new tokens will be minted. Secondly, the company stated that redemption support for CNH₮ will continue for one year from the announcement date, giving holders time to redeem their tokens. Tether will issue a separate reminder notice ahead of the redemption deadline.
CNH₮ Faces Low Demand and Market Pressures
As Tether wrote, “We continuously evaluate our stablecoin offerings to ensure they align with real-world usage, long-term sustainability, and the needs of the communities that rely on them. Community interest and adoption are central to every product decision we make.”
With that, the explicit reason behind Tether’s decision is that the CNH₮, yuan-pegged stablecoin, did not attract significant engagement, making it difficult to justify the operational, engineering, and compliance resources required to maintain it at Tether’s standards.
Tether Focuses on USDT
Also, Tether said about the evolving market conditions that reduced the token’s long-term viability. In addition, Tether wrote, “Our priority is to allocate resources where they can most effectively enhance security, reliability, and innovation across the digital asset landscape,” which explains that Tether has decided to concentrate on markets with better growth prospects and higher adoption rates.
With that note, Tether will continue to focus on its stablecoin ecosystem, which is USDT. Among several stablecoins, USDT is still the dominant stablecoin with a $183 million market cap and also tops with $80.16 billion in 24-hour trading volume. As the company intends to improve its liquidity, expand its tokenization infrastructure, and support new financial tools aimed at better serving global users and developers.
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Source: https://thenewscrypto.com/tether-shuts-down-cnh%E2%82%AE-stablecoin-due-to-low-demand-and-market-pressures/
