Tether Announces a New Synthetic Dollar Backed by Gold

TETHER Holdings, the issuer of the largest stablecoin in the cryptocurrency market, announced on Monday (June 17) the introduction of a new synthetic dollar

Cryptocurrency stablecoin issuer TETHER Holdings announced on Monday (June 17) the launch of a new synthetic dollar backed by gold. This new token will be traded as aUSDT via smart contracts on the Ethereum Mainnet blockchain.

The initiative is part of a broader effort by Tether to diversify beyond its flagship USDT stablecoin, which boasts a market capitalization of $112.5 billion and is pegged to the US dollar with reserves of US Treasury bills and other securities.

Stable Currency Value

A Stable Currency: Under the gold standard, currencies were directly pegged to gold, leading to a stable currency value that aimed to curb inflation and foster steady economic growth.

Controlled Money Supply: This standard dictated the amount of money that could be minted, which was pegged to a conservative ratio of the gold held. This setup inherently controlled the money supply and aimed to prevent hyperinflation, contributing to economic stability.

Facilitating Trade: The gold standard also enabled fixed exchange rates, which simplified international trade by reducing the risks associated with foreign exchange and facilitating a smoother flow of goods and investments globally.

This new synthetic dollar is created on the company's Alloy by Tether platform, which was developed by Moon Gold NA SA de CV and Moon Gold El Salvador SA de C Both companies are part of the Tether Group.

According to the company, this open platform is designed to facilitate the creation of other tethered assets, which could potentially include yield-bearing products.

“Alloy by Tether introduces a new class of digital assets, known as tethered assets, which are designed to follow the price of a reference asset via stabilisation strategies like over-collateralization with liquid assets and secondary market liquidity pools,” the company said.

Tether Gold, which is backed by physical gold stored in Switzerland, has a market capitalization of around US$573 million, according to the company.

News source：https://www.kdj.com/cryptocurrencies-news/articles/tether-announces-synthetic-dollar-gold.html

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