One possible solution is a new kind of stablecoin whose value is pegged to a real-world, physical stockpile of gold, argues Algoz’ Stephen Wundke.
Tether's gold-backed token swelled above $2 billion market cap, driven by record prices and surging retail demand, CEO Paolo Ardoino said in an interview.
Tether plans to launch its U.S.-compliant stablecoin USAT in December, aiming for mass reach in the creator economy, CEO Paolo Ardoino said in a CoinDesk interview.
Paolo Ardoino’s latest comment about bitcoin and gold echoes Tether’s policy of buying BTC with profits and building up gold exposure.
Most of the capital will be used to acquire tokenized gold reserves, aiming to build a publicly verifiable, blockchain-native treasury
The report comes after Antalpha, a key lender of mining hardware firm Bitmain, launched lending and infrastructure tools for Tether Gold (XAUT).
Tether's XAUT and Paxos' PAXG, the two largest gold-backed tokens, posted record monthly trading volumes in September as spot gold pushed above $3,800.
The surge comes after gold futures hit an all-time high and amid concerns over the impact of U.S. tariffs on Switzerland's gold exports.
Tether Holdings, the issuer of the market’s largest stablecoin, USDT, has revealed that it maintains a vault in Switzerland to safeguard an impressive $8 billion stockpile of gold. According to Bloomberg, the firm’s significant reserve of nearly 80 tons positions Tether as one of the largest gold holders globally, surpassed only by central banks and sovereign nations with the company based in El Salvador expressing intentions to expand its gold reserves further. Tether Reveals 5% Of Reserves In Precious Metals In a recent interview, Tether’s CEO, Paolo Ardoino, emphasized the security of their vault, claiming it to be among the most secure facilities worldwide. While he confirmed the vault’s location in Switzerland, he opted not to disclose its exact whereabouts, citing security concerns. Related Reading: PEPE Traders Spot Breakout Echo—Explosive Surge Back On The Table? Tether is best known for its stablecoin, USDT, which aims to maintain a one-to-one value with the US dollar. According to CoinMarketCap data, USDT dominates the stablecoin market with a capitalization of $158 billion. Circle’s USDC follows closely behind with a capitalization of $61 billion. However, both companies are expected to see a major surge in this metric as the recently approved US Senate stablecoin bill, the GENIUS Act, aims to provide issuers with a new regulatory framework that could further boost adoption and usage of the assets by traditional financial companies. The company also generates revenue by exchanging dollars for USDT tokens and investing the collateral in various assets, including US Treasuries. According to Tether’s latest financial report, precious metals now account for nearly 5% of the company’s reserves. Benefits Of The Gold-Backed XAUT Token In addition to USDT, Tether has introduced a gold-backed token known as XAUT, with each token representing one ounce of gold. Token holders have the option to redeem their XAUT for physical gold, which can be collected directly from the Swiss vault. Related Reading: Ethereum Sees $6 Billion In Tokenized Funds As Big Players Jump In Ardoino articulated a growing belief in gold as a safer asset compared to national currencies, particularly in light of rising concerns over the increasing debt levels in the United States. He noted that as these concerns grow, investors may seek alternatives, such as gold. The firm’s CEO further highlighted that every central bank within the BRICS nations is actively purchasing gold, which he believes has contributed to the rising price of the precious metal. Per the report, the decision to establish Tether’s own vault rather than relying on traditional precious metals vault operators was primarily influenced by cost considerations. As of press time, Circle’s newly launched stock, CRCL, has closed the trading day at $204, approximately a 31% gap between current valuations and their record price of $298. Featured image from DALL-E, chart from TradingView.com
The gold-linked XAUT0 token follows the protocol's Tether-linked USDT0 that has grown to $1.3 billion in supply and available on ten DeFi-focused blockchains.
Tether reported the first attestation report for its Tether Gold product under new El Salvador regulations as gold demand surges globally