Tether Proposes Yuan-Backed Stablecoin
Tether, Inc. has proposed the creation of a new stablecoin backed by Chinese yuan, to take advantage of China’s demand for trading and crypto transfers.
Tether, Inc., the printer of the USDT coin, may be planning the creation of another asset - CNHT, a stablecoin based on the Chinese yuan. The information is still unofficial and not confirmed by Tether, but has surfaced based on social media sources.
The potential for a new stablecoin is watched closely, as Tether is extremely influential for digital asset price discovery. The move arrives after the past few months saw Chinese traders and merchants drawn to USDT for ease of transfers and bypassing the country’s capital controls.
Currently, Tether is also busy changing the technology behind the USDT. Currently, 1.55 billion USDT have been transferred to the Ethereum network, with more flowing in as exchanges are switching wallets. Tether hopes to offer faster and cheaper transfers by abandoning the implementation on the Bitcoin Omni layer gradually.
But it is uncertain if the Ethereum-based USDT would be cheaper to use. Currently, the Tether smart contract on the Ethereum network is the top gas burner, taking up more than 15% of gas. While the price per regular transactions is 7 gWei, for Tether smart contract usage, the price has risen to more than 18 gWei. It is unknown what price USDT users will pay if all coins move to the Ethereum network and further gain influence.
The USDT influence is also reflected in trading volumes, which are now significantly higher in comparison to Bitcoin (BTC). USDT volumes are above $20 billion’s equivalent in 24 hours, while BTC trading has receded to around $17 billion in 24 hours. USDT is the leader, taking over more than 33% of all crypto trades, while BTC is in the second spot with a share of 31%. Additionally, each USDT coin travels through the crypto ecosystem around 5 times in 24 hours, keeping up high activity levels.