Tether Introduces New Stablecoin aUSDT Backed by Gold Reserves
Tether, the stablecoin issuer, recently announced the launch of a new synthetic stablecoin called “aUSDT”. Unlike its USD-backed counterpart, aUSDT is backed by gold reserves. Users can mint this new currency by collateralizing the XAUT token, which tracks the value of gold.
Developed by Alloy by Tether, aUSDT falls under the category of “Tethered Assets”. The goal of these assets is to maintain price stability by aligning their value 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 to facilitate trading without affecting market prices. This ensures the stable operation of Tethered Assets in the market.
According to the official website, Alloy by Tether is managed by Moon Gold NA, SA de CV and Moon Gold El Salvador, SA de CV, which are authorized by El Salvador’s National Digital Asset Committee (CNAD) and 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 and currently has a market value of approximately $573 million. XAUT is an ERC-20 token issued on the Ethereum blockchain, allowing gold to be traded in tokenized form.
aUSDT is a useful and innovative currency for users who want to have the familiarity of a “dollar-like” currency for digital transactions, payments, and remittances, without selling their holdings of gold-backed stablecoins. It allows users to enjoy the convenience of digital currencies while retaining XAUT as an investment asset.
Further reading:
Not just a leading stablecoin! Tether transforms into a “financial ecosystem builder”, launching four major sectors: data, finance, energy, and education.
What are the advantages of using gold as a value anchor?
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 underlying value is supported by gold. Gold is often considered an “inflation-resistant” asset that can retain its value during economic instability. Therefore, aUSDT backed by gold may be more stable in the long run compared to a stablecoin backed solely by the US dollar.
Even in the case of dollar depreciation, gold typically maintains its original value. This stronger intrinsic value guarantee of aUSDT instills higher confidence in users.
Tether states that this design not only meets the market demand for diversified investment tools but also provides more flexibility for institutional entities to manage their asset portfolios effectively.
“While the stability mechanism of aUSDT differs from traditional choices like USDT, this innovative solution represents an exciting milestone, and we can’t wait to see how it interacts with the market,” said Tether CEO Paolo Ardoino.
Source:
Bloomberg, The Block