Tether Unveils New Stablecoin aUSDT Backed by Gold Reserves
Tether, the stablecoin issuer, recently announced the launch of a new synthetic stablecoin called “aUSDT,” which tracks the value of the US dollar but is backed by gold reserves. Users can mint this new currency by collateralizing XAUT tokens that track the value of gold.
The aUSDT stablecoin is developed on the Alloy by Tether platform. According to the official statement, Alloy by Tether introduces a new asset class called “Tethered Assets” with the goal of maintaining the price stability of these currencies in line with specific reference assets such as the US dollar or gold.
To ensure stability, these strategies include overcollateralization using liquid assets and the establishment of a secondary market liquidity pool where market participants can easily trade without affecting market prices. The purpose is to ensure that Tethered Assets maintain stable value relative to their reference assets and operate smoothly in the market.
According to the official website, the Alloy by Tether platform is developed and managed by Moon Gold NA, SA de CV, and Moon Gold El Salvador, SA de CV, authorized by El Salvador’s National Digital Asset Committee (CNAD). Both companies are subsidiaries of the Tether Group.
As mentioned earlier, aUSDT can be minted by collateralizing Tether Gold (XAUT), which is backed by physical gold stored in Switzerland, with a current market value of approximately $573 million. XAUT is an ERC-20 token issued on the Ethereum blockchain, enabling gold to be traded in tokenized form on the blockchain.
For users who want to use a currency that feels familiar, like the US dollar, in digital transactions, payments, and remittances, but do not want to sell their gold-backed stablecoins, aUSDT is a useful and innovative currency. It allows users to enjoy the convenience of digital currency while retaining XAUT as an investment asset.
Further reading:
Not just a leading stablecoin! Tether transforms into a “financial ecosystem builder,” launching four sectors: data, finance, energy, and education.
What are the advantages of using gold as value support?
What is the significance of aUSDT, which tracks the value of the US dollar but is backed by gold reserves?
aUSDT has the same value as the US dollar (1 aUSDT = 1 USD), but its actual value is supported by gold. Gold is generally considered an “inflation-resistant” asset that can retain its value in times of economic instability. Therefore, aUSDT, backed by gold, may be more stable in the long run compared to stablecoins supported solely by the US dollar.
Even in the case of a depreciation of the US dollar, gold usually maintains its original value. This stronger intrinsic value guarantee of aUSDT and the higher confidence users have in it make it more reliable.
Tether states that this design not only meets the market’s demand for diversified investment tools but also provides more flexibility for institutional entities to manage their asset portfolios better.
“While the stability mechanism of aUSDT differs from traditional choices like USDT, this innovative solution represents an exciting milestone, and we are eager to see how it will interact with the market,” said Paolo Ardoino, CEO of Tether.
Sources:
Bloomberg, The Block