Tether, the world's largest stablecoin issuer, announced the launch of Alloy by Tether, which tracks the price of reference assets through stabilization strategies such as over-collateralization of liquid assets and secondary market liquidity pools. The currently launched stablecoin aUSD₮ is powered by Tether Gold (XAU ₮ ) Overcollateralized Minting.

XAU₮ issued by Tether

The gold stablecoin XAU₮ issued by Tether is issued in ERC-20. Each token is backed by one troy ounce of gold. Its contract address shows that the current circulating supply is 246,524.33 XAU₮, with a market value of approximately US$570 million. There are no custody fees and no trading gas fees, just a one-time 25 basis points fee upon purchase or redemption. And if you want to exchange it for physical gold, Tether can also ship physical gold bars to any address in Switzerland (additional shipping costs apply). However, physical delivery is limited to the fixed specifications of physical gold, and XAU₮ exceeding 430 TOZ is required to be redeemed into physical gold bars.

aUSD₮ is collateralized by XAU₮

Tether’s newly launched aUSD₮ can be considered a stablecoin that aims to track the value of one U.S. dollar. aUSD₮ is unique in that it is over-collateralized by Tether Gold (XAU₮), meaning it is backed by real physical gold stored in Switzerland.

Users can create aUSD₮ tokens using Tether Gold (XAU₮) as collateral. This is a very useful and innovative combination for users who want to conduct digital transactions, payments and remittances using a currency as familiar as the US dollar without having to sell XAU₮. Currently, Alloy by Tether smart contracts have been deployed on the Ethereum mainnet. Users can mint aUSD₮ by depositing Tether Gold (XAU₮) as collateral through a process managed by smart contracts compatible with Ethereum. The aUSD₮ smart contract ensures transparency by tracking all collateral and minted tokens, using a price oracle to continuously evaluate mint-to-value (MTV) ratios.

Announcement of the launch of digital asset tokenization platform

According to its announcement, Alloy by Tether is an open platform that allows for the creation of different Tether assets with broader support mechanisms, potentially including yield-generating products. Moon Gold NA, SA de CV and Moon Gold El Salvador, SA de CV, authorized by El Salvador’s CNAD, are responsible for the issuance and management of Tether Alloy to meet different customer segments and regulatory requirements.

Tether CEO Paolo Ardoino said:

This innovative solution marks an exciting milestone. We also plan to offer this innovative technology in our upcoming digital asset tokenization platform.

This article Tether launches gold-backed stablecoin aUSD₮ and will develop a digital asset tokenization platform first appeared on Chain News ABMedia.