Tether launches new 'synthetic' dollar backed by tokenized gold

The company behind the $110 billion stablecoin (USDT) Tether launched a new token minting platform called Alloy on the Ethereum network on Monday, which allows users to create tokenized gold powered by Tether (XAUT ) mortgaged tokens. Tether CEO Paolo Ardoino said in a blog post: “Alloy by Tether is an open platform that allows the creation of collateralized synthetic digital assets and will soon be part of the new Tether digital asset tokenization platform, which Set to launch later this year, Tether said in a press release that the platform may offer yield products in the future.

The first asset offered on the platform is aUSDT, whose price is pegged to the US dollar. Investors can mint aUSDT by depositing Tether’s XAUT as collateral. According to Tether, XAUT has a market cap of $570 million and is backed by physical gold stored in Switzerland. The press release explains that the aUSDT token is aimed at users who wish to use cryptocurrencies for payments and remittances without selling their gold-backed tokens. The position requires over-collateralization, meaning the number of new tokens a user can mint is maximized at 75% of the collateral value. MoonGoldNA, S.A.deC.V. and MoonGoldElSalvador, S.A.deC.V. will be responsible for the issuance of assets, which are regulated by the El Salvador National Commission for Digital Assets (CNAD). Tether’s new offering follows Tether’s efforts to expand its services beyond issuing USDT. USDT is the largest stablecoin by market capitalization and the backbone of the digital asset market. The company has recently invested in Bitcoin (BTC) mining, payment processing and artificial intelligence (AI) through cloud computing. Ardoino also outlined plans in April to launch a tokenization platform that would facilitate the creation of digital versions of a range of assets, including bonds, stocks, funds and loyalty rewards points.

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