Tether launches new ‘synthetic’ dollar backed by tokenized gold

Author: Krisztian Sandor, CoinDesk; Compiler: Baishui, Golden Finance

Tether, the company behind the $110 billion stablecoin (USDT), launched a new token minting platform called Alloy on the Ethereum network on Monday, which allows users to create tokens collateralized by Tether's tokenized gold (XAUT).

Tether CEO Paolo Ardoino said in the X post: "Tether's Alloy is an open platform that allows the creation of collateralized synthetic digital assets and will soon be part of the new Tether digital asset tokenization platform, which will be launched later this year." Tether said in a press release that the platform may offer yield products in the future. The first asset offered on the platform is aUSDT, which has a price pegged to the U.S. dollar. Investors can mint aUSDT by depositing Tether’s XAUT as collateral. According to Tether, XAUT has a market cap of $570 million and is backed by physical gold stored in Switzerland. The press release explains that aUSDT tokens are aimed at users who want to use cryptocurrencies for payments and remittances without selling their gold-backed tokens. The position requires overcollateralization, meaning the amount of new tokens a user can mint is maximized to 75% of the value of the collateral.

Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V. will be responsible for the issuance of the assets, which are regulated by the El Salvador National Digital Asset Commission (CNAD).

Tether’s new product follows Tether’s efforts to expand its services beyond issuing USDT, the largest stablecoin by market capitalization and a mainstay of the digital asset market. The company has recently invested in Bitcoin (BTC) mining, payment processing, and artificial intelligence (AI) through cloud computing.

Ardoino also outlined plans in April to launch a tokenization platform that would facilitate the creation of digital versions of a range of assets, including bonds, stocks, funds, and loyalty rewards points.