Tether Launches New \'Alloy\' Product Line of Tokenized Assets Backed by Gold

Stablecoin giant Tether, which now calls itself "the largest company in the cryptocurrency industry," has announced the launch of a "novel" product line called Alloy by Tether that is backed by tokenized gold.

Stablecoin giant Tether has now unveiled a ‘novel’ product line as part of its recent reorganization, kicking off with a gold-backed digital currency called aUSDT.

The new product, announced Monday, is the first in a lineup of ‘Alloy by Tether’ assets, which will be designed to track the price of a reference asset through stabilization strategies.

According to the company, these strategies include over-collateralization with liquid assets and secondary market liquidity pools.

The first token in the Alloy lineup is aUSDT, which Tether describes as a digital currency designed to track the U.S. dollar value and is over-collateralized by Tether Gold (XAUT). This means the coin is backed by real physical gold, which is being stored in Switzerland and vouched for by Xstare, a Swiss precious metals company.

Investors can mint aUSDT by depositing XAUT as collateral, and it’s worth noting that XAUT has a $570 million market cap, making the aUSDT + XAUT combo very useful for users "who want to engage in digital transactions, payments, and remittances with a currency that feels as familiar as the U.S. dollar without having to sell their XAUT."

Once minted, users will create a digital currency linked to the strength of gold's price, which Tether says should redefine stability in the digital space.

Tether CEO Paolo Ardoino called aUSDT a "synthetic dollar" in a statement, also noting that the new product lineup is "an open platform."

"We will integrate new types of collateralised digital assets as part of Tether's crypto tokenization platform, set to launch later in 2024," he added.

According to the Alloy by Tether website, gold-backed currencies can help prevent inflation due to the limited amount that can be minted, paving the way for a "natural" control of money supply that could drive economic stability.

The announcement of Alloy by Tether and the unveiling of its first product comes several weeks after Tether went through a reorganization that expanded its business to cater to four new business divisions.

Tether, which is behind the world's largest stablecoin, USDT, said in April that its expansion beyond the stablecoin business marked a transition in how it approaches "financial empowerment."

The new "core" crypto subsectors within its business are Data, Finance, Power and Edu(cation).

Based on its latest product lineup, it appears Tether is moving fast toward its tokenization goals, which the company said in April will fall under Tether Finance, a core department that will serve as the company's "cornerstone" for financial offerings and crypto token products.

News source：https://www.kdj.com/cryptocurrencies-news/articles/tether-launches-alloy-product-tokenized-assets-gold.html

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