Tether Introduces New Stablecoin aUSDT Backed by Gold Reserves
Stablecoin issuer Tether 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 digital currency by pledging Tether Gold (XAUT), a token that tracks the value of gold.
aUSDT is created on the Alloy by Tether platform, and according to the official statement, Alloy by Tether introduces a new asset class called “Tethered Assets.” The goal is to maintain the price stability of these stablecoins in line with specific reference assets such as the US dollar or gold, through stabilization strategies.
These strategies include over-collateralization using liquid assets and the establishment of a secondary market liquidity pool, which allows market participants to trade more easily without impacting market prices. The purpose is to ensure that Tethered Assets maintain a stable value in relation to their reference assets and operate reliably 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, which are authorized by the National Digital Assets Council of El Salvador (CNAD). Both companies are subsidiaries of the Tether Group.
As mentioned earlier, aUSDT can be minted by pledging Tether Gold (XAUT), which is backed by physical gold stored in Switzerland and currently has a market value of approximately $573 million. XAUT is an ERC-20 token issued on the Ethereum blockchain, enabling gold to be traded in token form.
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 holdings of gold-backed stablecoins, aUSDT is a useful and innovative digital currency. It allows users to enjoy the convenience of digital currencies while retaining XAUT as an investment asset.
Further reading:
Not just a leader in stablecoins! Tether transforms into a “financial ecosystem builder” with four major sectors: data, finance, energy, and education
What are the advantages of using gold as a value backing?
What does it mean for aUSDT to track the value of the US dollar but be backed by gold?
aUSDT has the same value as the US dollar (1 aUSDT = 1 USD), but its actual value is supported by gold. Gold is usually considered an “inflation-resistant” asset that can maintain value during economic instability. Therefore, aUSDT backed by gold may be more stable in the long run compared to stablecoins backed solely by the US dollar.
Even in the case of US dollar depreciation, gold usually retains its value. This stronger intrinsic value backing of aUSDT gives users more confidence in its stability.
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.
“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
