Tether has announced the launch of Alloy by Tether, a stablecoin backed by real gold. It brings in the concept of “tethered assets,” which are digital currencies pegged to the value of a real-world asset through mechanisms like over-collateralization.
The first tethered asset offered by Alloy by Tether is aUSDT, a stablecoin designed to maintain a one-to-one peg with the US dollar. What sets aUSDT apart from other stablecoins is its unique backing: each aUSDT token is over-collateralized by Tether Gold (XAUT), which represents physical gold securely stored in Switzerland.
Users can create aUSDT tokens by depositing XAUT as collateral. This allows them to participate in the digital economy using a familiar currency like the US dollar without having to sell their gold holdings. Alloy by Tether currently operates on the Ethereum blockchain, and minting aUSDT involves depositing XAUT through smart contracts that ensure transparency and maintain the required collateralization ratio.
Alloy by Tether is designed to be an open platform, enabling the creation of various tethered assets with different backing mechanisms, potentially including interest-bearing products. This technology offers a new approach for institutions to manage assets by integrating secure, gold-backed digital assets into their portfolios.
“We are excited to introduce a new class of digital assets that combines the stability of gold with a fiat currency peg,” said Paolo Ardoino, CEO of Tether. “This innovative solution marks a significant step forward for the cryptocurrency market, and we look forward to seeing how it evolves.”
Tether also plans to integrate this technology into its upcoming digital asset tokenization platform.