According to CryptoPotato, Tether CEO Paolo Ardoino announced a new synthetic dollar, aUSDT, over-collateralized by XAUt, Tether’s gold-backed digital asset, on June 17. The following day, industry analyst and stock-to-flow creator Willy Woo praised the move as a 'genius business idea.' Tether's USDT is currently earning on U.S. Treasury Bills, but the firm can now issue a stablecoin that earns on gold gains. Over the long term, gold yields 8% compared to T-Bills at 0% to 5%, offering greater potential for profits.
Woo also speculated that Tether might issue a bUSDT stablecoin backed by Bitcoin, given the firm's growing BTC treasury. However, he noted that this wouldn't make sense currently due to bear market drawdowns. He compared the asset to Terraform Labs’ Terra and Luna, a stablecoin backed by a volatile asset. As part of the announcement, Ardoino introduced Alloy by Tether, an open platform that allows users to create collateralized synthetic digital assets. This will soon be part of the new Tether digital asset tokenization platform, which is set to launch later this year.
Tether Gold, or XAUt, which tracks the price of the commodity, currently has a market capitalization of $572 million. It was trading at $2,318 at the time of writing. Gold prices hit an all-time high of $2,426 per ounce on May 20 but have retreated slightly since. Tether is the market leader for dollar-pegged stablecoins, with a record-high circulation of $112.5 billion USDT and an overall market share of around 70%. Its nearest competitor is Circle’s USDC, which has a circulation of $32.6 billion and a market share of 20%. The total stablecoin market cap is $162 billion, representing around 6.5% of the total crypto market.