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The Future of CNH₮: Tether’s Strategic Withdrawal
Tether, the prominent stablecoin operator, has announced its plan to cease support for the offshore Chinese Yuan token, CNH₮. This decision stems from several considerations, including a noticeable lack of market demand for the token.
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One-Year Window for CNH₮ Redemption
In a strategic update published on its blog, Tether communicated its intention to phase out the CNH₮ stablecoin. The decision is driven by a comprehensive evaluation of factors such as market demand, operational efficiency, and the token’s alignment with the broader cryptocurrency ecosystem.
The official statement emphasized:
Community interest and adoption guide every decision we make regarding Tether tokens. We evaluate market demand, operational sustainability, and ecosystem conditions influencing long-term usability. Our focus is on directing resources towards enhancing security, reliability, and innovation in the digital asset landscape.
Tether highlighted that CNH₮ experienced limited interest and adoption compared to its other offerings, which did not justify the technical and operational efforts invested. Effective immediately, Tether has halted the issuance of new CNH₮ tokens. Existing CNH₮ holders have a year to redeem their tokens before the stablecoin is completely retired. Tether plans to issue a reminder as the redemption deadline approaches.
The company remains committed to supporting global stablecoin growth and adoption, asserting:
Tether will continue to concentrate on stablecoins and infrastructures that exhibit robust, organic adoption and long-term relevance. This entails enhancing core stablecoin liquidity, developing tokenization infrastructure, and introducing new financial tools that better serve global users and innovators.
Tether remains the largest stablecoin operator globally with USDT, which has a market capitalization of approximately $183.7 billion. Earlier this year, Tether launched USAT, a stablecoin specifically designed for the American market.
African Giants Lead the Stablecoin Demand Surge
Recent research conducted by BVNK, in partnership with Coinbase, YouGov, and Artemis, has shown that stablecoin demand is particularly high in Africa’s largest economies. The survey, which polled 4,658 adults across 15 countries, discovered that 80% of Nigerian and South African respondents currently hold stablecoins, with 75% planning to increase their holdings. This trend is driven by the need to safeguard against the instability of local currencies.
As of now, the total stablecoin market cap stands at $310 billion, with optimistic projections for future expansion following the approval of the GENIUS Act in July.
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