What Happened?
The stablecoin protocol USDT0 has launched “XAUT,” allowing “digital gold” to move freely across blockchains. This newly introduced XAUT0 token is built on Tether’s physically gold-backed XAUT, enabling seamless transfers across different blockchains, akin to having a “magic door,” without the need for traditional complex bridging processes. This will significantly expand the potential of digital gold in trading and DeFi (decentralized finance) applications, such as being used as collateral.
Tether replicates the successful model of USDT0, bringing gold into mainstream crypto applications. The launch of XAUT0 is another strategic move following USDT0. Tether applies the same technology to gold this time, demonstrating their commitment to further integrate tangible assets like gold into crypto-native applications, making ancient forms of value storage compatible with DeFi.
The initial deployment of XAUT0 is on The Open Network (TON). Since TON is the blockchain of the popular messaging application Telegram, this also means that millions of Telegram users will be able to buy and use this gold-backed token directly within the app’s wallet.
Tether Moves Gold onto the Blockchain, Gold Can Also Play in DeFi
The stablecoin protocol USDT0 is actively pushing tokenized gold into crypto-native applications, aiming to make the world’s oldest form of value storage compatible with decentralized finance (DeFi) applications. The stablecoin protocol USDT0 is a new type of stablecoin protocol officially launched by Tether (the company behind USDT) in January 2025, known as the cross-chain bridging version of USDT, primarily targeting issues such as high costs, liquidity fragmentation, and operational complexities faced by USDT when used across multiple blockchains.
The digital gold launched by Tether (Tether Gold, abbreviated as XAUT) has each token corresponding to one troy ounce of physical gold stored in Swiss vaults, pegged to specific gold bars that meet the standards of the London Bullion Market Association (LBMA), and it also supports physical gold redemption.
Imagine you have digital gold XAUT, but it can currently only be used on specific blockchains, much like only being able to withdraw money from a specific bank ATM. Now, a new platform has launched a digital gold token called “XAUT0.” XAUT0 acts like an “upgraded” or “super-mobile” version of XAUT, with its most notable feature being the use of a technology called LayerZero, which is “omnichain”.
What does “omnichain” mean? Simply put, it’s like building a “magic door” for your digital gold (XAUT0). Previously, if you wanted to transfer gold from one blockchain to another, it required a complicated “bridging” or “wrapping” process, akin to transporting goods from one city to another, requiring a change of vehicle or vessel in between. But with “omnichain” technology, “XAUT0” can move freely between different blockchains without these troublesome “bridges” or “packaging.”
Initial Launch and Future Prospects
Tether has announced a partnership with the TON Foundation to launch the full-chain version of its gold stablecoin XAUt0 on The Open Network (TON) for the first time, aiming to expand the token’s availability across various ecosystems. Telegram users will be able to buy and use this gold-backed token directly within the Telegram wallet, with the potential to bring tokenized assets to millions of users.
TON was initially developed by Telegram and continued to evolve as an independent operating project following a settlement with the U.S. Securities and Exchange Commission (SEC) in 2020. Plans to promote XAUT0 to more blockchains are set to take place in the third quarter of this year. Lorenzo R. stated, “We will be launching on multiple chains, some of which will be more focused on DeFi applications.”
The non-omnichain version of XAUt is currently the largest gold stablecoin by market capitalization, with data from CoinGecko showing its market cap exceeding $832 million, closely followed by Paxos’ Pax Gold (PAXG), with a market cap of $811 million (as of June 2). It’s noteworthy that XAUt is currently only available on the Ethereum blockchain. According to Tether’s report for the first quarter of 2025, Tether has over 7.7 tons of physical gold as reserves for the XAUT stablecoin.
The launch of XAUt0 may be modeled after Tether’s earlier introduction of USDT0. USDT0 was designed by Tether to facilitate the smooth circulation of their dollar stablecoin USDT across different blockchains. It acts like a “universal highway,” allowing USDT to move seamlessly across about ten different blockchains, including Arbitrum, Optimism, and Kraken’s Ink. Since its launch earlier this year, the circulation of USDT0 has been substantial, accumulating a scale of $1.3 billion.
Lorenzo R., co-founder of USDT0, stated in an interview with CoinDesk, “I am a Bitcoin holder myself, but I also love gold and want a simpler, more direct way to acquire and use it in my daily life.” He added, “We are still in a very early stage of integrating physical assets and commodities into DeFi protocols.”
References: cointelegraph, coindesk