Tether launches stablecoin aUSD₮ backed by gold, will develop digital asset tokenization platform

The world's largest stablecoin issuer, Tether, announced the launch of Alloy by Tether, which tracks the price of reference assets through strategies such as overcollateralization with liquid assets and a secondary market liquidity pool. The stablecoin aUSD₮, initially launched, is minted by overcollateralizing Tether Gold XAU₮.

Tether Issues XAU₮ Stablecoin

The gold-backed stablecoin XAU₮ issued by Tether is based on the ERC-20 standard, with each token backed by one troy ounce of gold. The contract address is publicly available. Currently, there are 246,524.33 XAU₮ in circulation, with a market value of approximately 570 million USD. There are no custody fees or trading gas fees, with only a one-time fee of 25 basis points required for purchases or redemptions. If users wish to convert it into physical gold, Tether can arrange for physical gold bars to be delivered to any address in Switzerland, with additional shipping costs. However, physical redemption is subject to the fixed specifications of physical gold, requiring a minimum of 430 TOZ of XAU₮ for redemption into physical gold bars.

aUSD₮ Collateralized by XAU₮

The newly introduced aUSD₮ by Tether can be seen as a stablecoin pegged to the value of one USD. What sets aUSD₮ apart is that it is over-collateralized by Tether Gold XAU₮, meaning it is backed by real physical gold stored in Switzerland.

Users can utilize Tether Gold XAU₮ as collateral to create aUSD₮ tokens. For users who want to engage in digital transactions, payments, and remittances using a currency familiar as the USD without the need to sell XAU₮, this combination proves to be highly useful and innovative. Currently, the Alloy by Tether smart contract is deployed on the Ethereum mainnet. Users can deposit Tether Gold XAU₮ as collateral through a process managed by Ethereum-compatible smart contracts to mint aUSD₮. The aUSD₮ smart contract ensures transparency by continuously evaluating the minting value-to-collateral ratio through tracking all collateral and minted tokens, and utilizing price oracles.

Plans to Launch a Digital Asset Tokenization Platform Announced

According to the announcement, Alloy by Tether is an open platform that allows for the creation of various Tether assets with broader support mechanisms, potentially including revenue-generating products. Moon Gold NA, SA de CV, and Moon Gold El Salvador, SA de CV authorized by the CNAD of El Salvador, are responsible for the issuance and management of Tether Alloy to meet the needs of different customer segments and regulatory requirements.

Tether CEO Paolo Ardoino stated:

This innovative solution marks an exciting milestone. We also plan to offer this innovative technology on the upcoming digital asset tokenization platform.