Tether has officially discontinued CNH₮, its stablecoin pegged to the offshore Chinese yuan. The announcement, published on February 20, 2026, halts all new token issuance immediately and gives existing holders one year to redeem their balances. After February 20, 2027, Tether will no longer process CNH₮ redemptions.
The timing is hard to ignore. Just two weeks earlier, on February 6, the People's Bank of China and seven other regulatory bodies issued a directive formally banning all unapproved yuan-linked stablecoins, whether issued domestically or offshore. Tether's stated reason, "limited sustained community demand," is true on its face. But the regulatory backdrop turns a quiet product sunset into a signal about where the stablecoin market is headed.
A $320,000 Stablecoin in a $143 Billion Empire
CNH₮ was never a significant part of Tether's portfolio. At the time of the announcement, its market cap sat around $320,000 with roughly 20.5 million tokens in circulation against a maximum supply of 25 million. For context, Tether's flagship USD₮ commands a market cap north of $143 billion. CNH₮ represented less than 0.0003% of Tether's total stablecoin footprint.
Launched in 2019 as an ERC-20 token on Ethereum and later expanded to Tron in 2022, CNH₮ was positioned as a decentralized tool for exchanging value denominated in China's offshore currency. The offshore yuan (CNH) trades freely outside mainland China, unlike the tightly controlled onshore yuan (CNY), and is commonly used in Hong Kong and international financial centers.
But adoption never materialized at scale. Tether's official announcement framed the decision as a strategic pivot: "CNH₮'s usage levels don't justify the continued operational support required." The company said it will redirect resources toward stablecoins demonstrating "strong, organic adoption and long-term relevance," including core liquidity infrastructure and tokenization products.
China's Stablecoin Crackdown Leaves No Room for Ambiguity
The PBOC's February 6 directive went far beyond previous cryptocurrency restrictions. Earlier bans targeted crypto trading and mining. This one specifically named yuan-pegged stablecoins and tokenized real-world assets (RWAs), applying the prohibition to both Chinese and foreign issuers targeting Chinese users.
The regulatory language was sweeping: unapproved issuance of RMB-linked stablecoins is "strictly forbidden," covering the onshore CNY and offshore CNH alike. Tokenized equities, bonds, and property also cannot be issued or traded without explicit regulatory approval.
Analysts interpret the move as a defensive play to protect the digital yuan (e-CNY). In January 2026, the PBOC approved interest-bearing wallets for e-CNY, a feature that makes the central bank digital currency (CBDC) directly competitive with stablecoin yield products. The logic is straightforward: Beijing does not want privately issued tokens competing with its own digital currency for capital flows, especially when those tokens could circumvent strict capital controls.
For Tether, the calculus becomes simple. Operating a yuan-pegged stablecoin in an environment where the issuing nation explicitly bans it creates legal exposure with virtually no upside. A $320,000 market cap is not worth the compliance headache.
The Pattern: EUR₮, Now CNH₮
This is the second Tether stablecoin to be discontinued in three months. In November 2025, Tether sunset EUR₮, its euro-pegged stablecoin, citing the EU's Markets in Crypto-Assets (MiCA) regulation. EUR₮ had once held a market cap above $500 million but had withered to $27 million as MiCA-compliant competitors like Circle's EURC and Societe Generale's EURCV captured market share.
The pattern is clear: when a jurisdiction either bans or heavily regulates fiat-pegged stablecoins, Tether exits rather than complies. For MiCA, Tether announced plans for new compliant tokens (EURQ and USDQ) built on its Hadron platform. No such replacement has been announced for CNH₮, likely because China's ban leaves no path to legal issuance.
This portfolio contraction raises a strategic question. Tether's dominance rests on USD₮, which commands roughly 60% of the global stablecoin market. Its secondary products, MXN₮ (Mexican peso), XAU₮ (gold), and now-discontinued EUR₮ and CNH₮, were diversification bets. Two of those bets have been unwound in rapid succession, concentrating Tether's relevance even further around the US dollar.
What CNH₮ Holders Need to Do
If you hold CNH₮, the timeline is clear:
- Now through February 20, 2027: Redeem CNH₮ through Tether's standard redemption process. Standard terms apply.
- Before the deadline: Tether will issue a separate reminder notice as the cutoff approaches.
- After February 20, 2027: No further redemptions will be processed.
Given the token's thin liquidity, holders should not wait. Secondary market exits may become increasingly difficult as awareness of the discontinuation spreads and market makers step away.
For users who relied on CNH₮ for yuan-denominated crypto transactions, the options narrow considerably. No major stablecoin issuer currently offers a yuan-pegged alternative that operates outside China's regulatory perimeter. The PBOC's ban effectively makes yuan stablecoins a dead product category for Western issuers.
Stablecoin Fragmentation and What It Means for Crypto Spending
The broader trend points toward a fragmenting stablecoin landscape. USD-pegged tokens dominate, but regional alternatives are being squeezed by local regulators who either want their own CBDCs or demand compliance that most issuers cannot or will not meet.
For crypto card users, this fragmentation matters. Most crypto cards settle transactions in USD or EUR stablecoins. Cards that support stablecoin spending typically rely on USDC or USDT for the funding layer. A world where yuan, euro, and other fiat-pegged stablecoins are systematically eliminated by regulators further entrenches the dollar's role as crypto's default settlement currency.
This also affects users in China and the broader APAC region. Without a yuan-pegged stablecoin, Chinese offshore users who want to interact with DeFi or crypto spending products must convert through dollar-denominated tokens, adding an FX conversion step and the associated costs. Cards with zero FX markup become more valuable in this environment, as they absorb the conversion cost that a native yuan stablecoin would have eliminated.
The discontinuation of CNH₮ is a minor event by market cap but a meaningful signal about jurisdiction risk in stablecoins. Tether's product lineup is getting smaller, not bigger, and the surviving tokens are the ones denominated in currencies whose governments have not yet decided to ban them.
FAQ
How much time do CNH₮ holders have to redeem? One year from the announcement date. Redemptions will be processed under standard terms until February 20, 2027, after which Tether will stop honoring them entirely.
Why did Tether discontinue CNH₮? Tether cited low community demand and usage levels that did not justify operational costs. The decision also follows China's February 6 ban on all unapproved yuan-linked stablecoins, which removed any remaining legal pathway for the product.
Is there a replacement for CNH₮? No. Unlike the EUR₮ discontinuation, where Tether announced plans for MiCA-compliant euro tokens (EURQ/USDQ), no yuan-pegged successor has been announced. China's blanket ban makes a replacement effectively impossible.
Does this affect USDT or other Tether tokens? No. USD₮, MXN₮, and XAU₮ remain fully operational. The discontinuation applies only to CNH₮.
Is this related to China's CBDC? Likely yes. The PBOC approved interest-bearing e-CNY wallets in January 2026, making the digital yuan directly competitive with stablecoin products. Banning private yuan stablecoins clears the field for the state-issued alternative.
Overview
Tether has discontinued CNH₮, halting new issuance immediately and giving holders until February 20, 2027, to redeem. The move follows China's February 6 ban on all yuan-pegged stablecoins and marks the second Tether product sunset in three months after EUR₮. With a market cap of just $320,000, CNH₮ was economically insignificant, but its removal signals a broader pattern: as jurisdictions ban or regulate fiat stablecoins, Tether retreats rather than complies, concentrating its portfolio further around USD₮.
Recommended Reading
- Tether USDT Supply Falls 1.7 Percent in Its Biggest Monthly Retreat Since the FTX Collapse
- Tether CEO Reveals 94 Tonnes of Tokenized Gold Moved in Six Months
- The SEC Just Slashed Stablecoin Capital Charges From 100 Percent to 2 Percent
