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Tether has announced the discontinuation of support for its stablecoin CNHT, which is pegged to the offshore Chinese yuan (CNH). The reason cited is the low demand for the asset.
The company stated that it evaluated the token’s usage metrics, operational costs, and its economic viability before making this decision.
“The level of CNHT usage does not justify the need for ongoing operational support to meet Tether’s standards. We will continue to offer redemption services for one year from the announcement date, after which support will cease,” the company remarked.
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CNHT holders are required to exchange their tokens within this timeframe. After the redemption period ends, the ability to redeem will be halted. Tether plans to allocate the freed resources to enhance liquidity for key stablecoins, develop tokenization infrastructure, and launch new financial instruments.
Lena Zhou, an expert from the International Institute of Digital Asset Management, noted that the stablecoin market is experiencing a liquidity concentration effect: projects lacking a critical mass of users are gradually losing ground. According to her, CNHT failed to generate sufficient demand despite its technical soundness.
In recent years, numerous collateralized and algorithmic stablecoins have been launched, many of which subsequently shut down due to a lack of competitive advantages or sustainable demand. The one-year redemption period, Zhou stated, provides holders ample time to exit their positions without market pressure.
The CNHT stablecoin was introduced by Tether in September 2019 as an ERC-20 token on the Ethereum network. It was part of the company’s lineup of currency-pegged assets alongside USDT and EURT.
Previously, Bo Hines, head of Tether’s U.S. division, indicated that the company would increase its investments in U.S. government bonds, which are utilized to back the USDT and USAT stablecoins.
