Tether Discontinues Support for Chinese Yuan-Pegged Stablecoin: Here’s Why?

On February 20, Tether discontinued support for its offshore Chinese yuan-pegged stablecoin, CNH₮ (also known as CNHT).

CNH₮ was launched in 2019 to provide cryptocurrency traders with exposure to the offshore Chinese yuan (CNH). However, unlike Tether’s flagship USDT token, CNH₮ never achieved significant trading volume or market depth.

Tether stated it would immediately cease minting new CNH₮ tokens. The company framed the move as part of a broader review of underutilized digital assets within its product portfolio.

What was the Major Factor Behind the Discontinuation?

Low demand was a primary factor behind the discontinuation. CNH₮ saw limited trading activity and minimal integration across exchanges and decentralized finance platforms.

Compared with USDT, which consistently ranks among the highest-volume digital assets globally, CNH₮ remained a niche product. Market data shows that its liquidity levels were insufficient to justify continued operational support.

Stablecoin issuers face infrastructure, compliance, and maintenance costs. When a token does not reach a sustainable scale, continued support becomes inefficient. In this case, CNH₮ represented a small fraction of Tether’s overall stablecoin supply.

Industry analysts note that stablecoin issuers often retire low-utility tokens to concentrate resources on higher-volume products. This pattern has appeared across the sector as competition intensifies and regulatory standards tighten.

How Did Chinese Regulations Influence the Decision?

Regulatory pressure from China was another significant factor.

The People's Bank of China (PBOC) has repeatedly warned about unauthorized yuan-pegged stablecoins and tokenized real-world assets. Authorities prohibit domestic use of such instruments and impose penalties on intermediaries that facilitate overseas issuers.

China’s regulatory framework aims to limit systemic financial risks and maintain strict control over currency issuance. While state-approved digital asset initiatives may proceed under supervision, privately issued yuan-linked tokens face substantial compliance hurdles.

Although CNH₮ targeted offshore CNH exposure rather than onshore CNY markets, regulatory uncertainty reduced its practical utility. For exchanges and institutional partners, compliance risk remains a central consideration.

What Happens to CNH₮ Holders?

Tether outlined a structured wind-down process.

Immediate Actions:
As of February 20, 2026, Tether stopped minting and issuing new CNH₮ tokens.

Redemption Period:
Existing holders may redeem CNH₮ for one year, until February 20, 2027, under Tether’s terms of service. After this date, redemption support will end. The company stated it will issue a final notice before the deadline.

Users are advised to redeem their tokens through official Tether channels. Failure to do so before the cutoff could result in loss of redemption access.

Given CNH₮’s small circulating supply and limited exchange presence, analysts do not expect significant disruption in broader crypto markets.

What Does This Mean for the Stablecoin Market?

The discontinuation reflects ongoing consolidation within the stablecoin sector. Issuers are increasingly prioritizing liquidity, compliance, and operational efficiency.

Tether remains the issuer of USDT, the largest USD-pegged stablecoin by market capitalization. The company appears to be reallocating resources toward products with stronger trading volumes and long-term liquidity.

The decision also highlights the challenges facing non-USD stablecoins. While dollar-pegged tokens dominate global crypto trading pairs, alternative currency stablecoins often struggle to achieve comparable network effects.

In jurisdictions with strict monetary controls, such as China, currency-pegged stablecoins face regulatory barriers that limit adoption. As a result, issuers may reconsider products tied to tightly managed fiat currencies.

Market observers note that CNH₮’s retirement is unlikely to trigger systemic risk. Its market capitalization of roughly $2.57 million represented a negligible share of global stablecoin supply.

How Does This Reflect Broader Industry Trends?

Stablecoin issuers now operate under increasing global scrutiny. Regulators in multiple regions are developing frameworks that address reserve transparency, anti-money laundering controls, and cross-border payments.

Against this backdrop, maintaining low-demand tokens introduces cost without corresponding utility. The retirement of CNH₮ signals a focus on scale and regulatory alignment.

For traders seeking yuan exposure, alternatives may include other stablecoins, offshore financial instruments, or traditional fiat proxies. However, each option carries jurisdiction-specific compliance considerations.

The stablecoin sector continues to evolve toward fewer, higher-liquidity assets with clearer regulatory standing.

Conclusion

Tether’s decision to discontinue CNH₮ reflects a practical review of adoption, liquidity, and regulatory exposure. The token’s limited scale and China’s restrictive stance on yuan-pegged digital assets reduced its viability. 

By ending new issuance and providing a one-year redemption window, Tether has implemented an orderly wind-down process. The move reinforces a broader industry shift toward focusing on high-liquidity stablecoins that meet regulatory and operational standards.

Sources:

• Reuters: China bans unauthorized offshore issuance of Yuan-pegged stablecoins
• Tether Blog: Announcing its discontinued support for CNH₮ stablecoin
• Coindesk: China expands crypto crackdown to stablecoins, asset tokenization