#Tether launches a stable alloy, indexed to the US dollar, supported by gold
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Tether Launches Stable Alloy, Pegged to US Dollar, Backed by Gold
Tether is entering new territory with the launch of Alloy (aUSDT), a gold-backed stablecoin pegged to the US dollar. According to Tether, Alloy will be over-collateralized by Tether Gold (XAUt), a token representing ownership of physical gold, while being pegged to the US dollar. This arrangement makes Alloy a synthetic dollar, designed to mimic the value and functionality of the U.S. dollar without direct backing.
In an explanatory post on X, Tether described tethered assets as digital assets that are intended to track the reference price of another asset through various stabilization mechanisms. Alloy by Tether claims to offer long-term holders the ability to maintain exposure to gold while simultaneously obtaining a dollar-referenced tethered asset for everyday transactions and payments. Alloy can be minted on the new Alloy by Tether platform, offering a unique blend of stability and flexibility for digital asset holders.
The introduction of aUSDT offers both stability and flexibility. Tether has indicated that other tethered assets, including yield-based products, could also be developed on the Alloy platform. The synthetic dollar can be minted by depositing XAUt via a smart contract and price oracles, allowing users to transact with aUSDT while keeping their gold-backed Tether assets.
The move follows Tetherâs record $4.5 billion in profits in Q1 2024, driven primarily by Bitcoin and gold. The creation of aUSDT was led by Tetherâs subsidiaries Moon Gold and Moon Gold El Salvador. Tether CEO Paolo Ardoino noted that Alloy by Tether would be part of a broader real-world asset tokenization platform launching later this year.