By Anjali Kochhar
Tether Holdings Limited, the issuer of the world’s largest stablecoin USDT, has announced it will discontinue support for its Chinese yuan pegged stablecoin CNH₮ following a regulatory warning from Chinese authorities and continued weak market demand. The decision marks a notable shift in the company’s product strategy as regulatory scrutiny intensifies around fiat linked digital assets.
In a statement issued on February 20, Tether confirmed it has halted all new issuance of CNHâ‚® with immediate effect. The wind down process will take place in two phases. The first phase involves stopping the minting and distribution of new tokens. The second phase will conclude with the end of redemption services for existing holders on February 21, 2027. Until that date, users will be able to redeem their CNHâ‚® tokens under existing terms. The company has said it will notify holders again before the final redemption deadline.
Tether attributed the move primarily to limited adoption and low demand for the offshore yuan stablecoin. According to the company, the token’s scale no longer justified the operational, technical, and compliance resources required to maintain it. Tether stated that it plans to redirect those resources toward its core offerings, including USDT and other tokenization initiatives that continue to see stronger global usage.
The announcement follows a recent warning from Chinese regulators, including the People’s Bank of China, which reiterated that the issuance of unapproved yuan pegged stablecoins is not permitted. Chinese authorities have maintained strict controls over cryptocurrency activities for several years, prohibiting privately issued digital currencies and related financial products within the mainland. The latest warning further reinforced that stance and added pressure on projects linked to the yuan.
CNHâ‚® was originally introduced as an offshore yuan linked stablecoin designed to provide traders and institutions with digital access to Chinese currency exposure outside mainland China. However, it struggled to gain significant traction compared to dominant dollar pegged stablecoins such as USDT, which continues to hold the largest share of the global stablecoin market.
Market analysts say the decision reflects broader shifts within the stablecoin sector, where issuers are increasingly prioritizing products with clear regulatory pathways and strong adoption. As governments worldwide tighten oversight of digital assets, companies are reassessing offerings that face uncertain compliance landscapes.
Existing CNHâ‚® holders are advised to redeem their tokens before the 2027 deadline to avoid holding an unsupported asset.
