Stablecoin Issuer Tether Launches Synthetic Dollar Backed by Tokenized Gold

TL;DR

• Tether has launched a synthetic Dollar backed by tokenized gold.

• Users can mint new tokens using Tether’s Alloy platform. 

Tether Launches Its Synthetic Dollar

USDT issuer Tether announced on Monday that it has launched a new token minting platform called Alloy on the Ethereum network. According to its press release, Alloy allows users to create tokens collateralized by Tether's tokenized gold (XAUT).

While commenting on this latest development, Paolo Ardoino, CEO of Tether, said,

"Alloy by Tether is an open platform that allows to create collateralized synthetic digital assets and will soon be part of the new Tether digital assets tokenization platform, launching later this year." 

Tether added that Alloy may potentially offer yield-bearing products in the future. The company also revealed that the first asset available on the platform is aUSDT, whose price is pegged to the U.S. dollar. Alloy users can mint aUSDT by depositing Tether's XAUT as collateral. 

Tether pointed out that XAUT currently has a market cap of $570 million and is backed by physical gold stored in Switzerland. 

The synthetic dollar targets users who wish to use crypto for payments and remittances without selling their tokenized gold. However, Tether revealed that the amount of new tokens users can mint is maximized at 75% of the collateral value.

Tether put Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V. in charge of the issuance. The companies are regulated by El Salvador's National Commission of Digital Assets (CNAD).

The launch of the synthetic dollar comes as Tether looks to expand its services beyond its USDT stablecoin offering. Tether recently invested in Bitcoin mining payment processing and artificial intelligence (AI) via cloud computing.

The company’s CEO recently revealed that they have earmarked $1 billion to invest in deals over the next 12 months.