Tether Launches Gold-Backed Synthetic Dollar aUSDT, Touting New Digital Asset Tokenization Platform

Tether, the issuer of the largest stablecoin in the cryptocurrency market, USDT, announced Monday the creation of a new synthetic dollar backed by gold.

Cryptocurrency market standard and the issuer of the largest stablecoin, Tether, announced the creation of a new synthetic dollar backed by gold on Monday. The token, denoted as aUSDT, was created on the company’s platform, Alloy by Tether.

By utilizing smart contracts on the Ethereum Mainnet blockchain, users can mint aUSDT by over-collateralizing it with another Tether token that represents the value of gold.

Tether Launches Alloy

As stated in the announcement, Alloy by Tether, a creation of Moon Gold NA S.A. de C.V. and Moon Gold El Salvador S.A., both members of the Tether Group, serves as the foundation for the newly launched token.

Alloy, in the words of Tether’s CEO Paolo Ardoino, is an open platform for creating synthetic digital assets that are collateralized and will soon be a part of the company’s new digital asset tokenization platform, set to launch later this year.

Moreover, Alloy enables the creation of various “tethered assets,” potentially including products that bear yield. The platform’s stabilization strategies, such as over-collateralization with liquid assets and secondary market liquidity pools, will reportedly ensure the price stability of these assets. Ardoino further stated on the matter:

We are excited to announce the launch of Alloy by Tether, introducing a class of digital assets backed by gold and tethered to a reference fiat currency. While the stabilization mechanism is different compared to traditional options like USD₮, this innovative solution marks an exciting milestone, and we eagerly anticipate how it will interact with the rest of the market. Moreover, we plan to make this innovative technology available in our upcoming digital asset tokenization platform as well.

Transactions And Payments

The underlying asset for aUSDT, Tether Gold (XAUt), has a market cap of around $573 million. The physical gold backing Tether Gold is reportedly stored securely in Switzerland.

According to the stablecoin issuer, this gold-backed digital asset enables users to engage in transactions, payments, and remittances using a currency pegged to the US dollar while maintaining ownership of gold-backed digital assets.

With its USDT stablecoin, Tether has experienced significant financial success, generating a profit of $4.5 billion in the first quarter alone, as stated in its attestation. However, regulators have scrutinized the quality of assets backing stablecoins like USDT.

Incorporated in the British Virgin Islands, Tether settled allegations with the New York Attorney General and the Commodity Futures Trading Commission (CFTC) in 2021 regarding reserves disclosure and transparency.

Overall, Tether’s introduction of a gold-backed synthetic dollar, aUSDT, marks another step in expanding the company’s stablecoin offerings. By leveraging the Alloy by Tether platform, users can now access a digital asset that combines the stability of the US dollar with the intrinsic value of physical gold.

News source：https://www.kdj.com/cryptocurrencies-news/articles/tether-launches-gold-synthetic-dollar-ausdt-touting-digital-asset-tokenization-platform.html

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