Tether Gold (XAUt) is a gold-backed ERC-20 token that was introduced by Tether in January 2020. It is designed to digitize the value of gold, giving users direct access to the precious metal via a digital coin. Tether Gold is one of several gold-backed tokens that are currently available in the market, alongside other tokens such as DGX.
Tether is the global leader in fiat-backed stablecoins, with a capitalization that has overtaken almost every other crypto.
Tether Gold is designed to tackle the problem of cryptocurrency volatility. These coins are pegged to an underlying asset, which in the case of Tether Gold is Gold. Tether Gold provides users with the benefits of a digital coin backed by a physical asset, such as ease of trade and low transaction and storage costs. This makes it a more attractive option than traditional alternatives, such as Gold ETFs, and lowers entry barriers for non-institutional investors to the gold market.
Each Tether Gold token (XAUt) represents one troy fine ounce of London Good Delivery gold, which is held in a vault in Switzerland. The tokens can be fractionalized, allowing for small increments of 0.000001 troy fine ounces. Holders of the tokens have the option to redeem them for the associated physical gold, which can be delivered to a specified location in Switzerland, or they can arrange to sell their assets and take the proceeds.
The Tether Gold platform employs the technology and functionality of Tether’s fiat-based stablecoins to physical gold. The goal of the project is to mobilize gold markets and provide anyone with the opportunity to participate. Tether Gold has several advantages over other gold-backed tokens, including its availability on multiple blockchains and the lack of custody fees.
Tether Gold offers a convenient and accessible way for individuals to invest in gold. The token’s gold-backing and stablecoin design provide a degree of stability and security not found in other cryptocurrencies. By providing users with direct access to gold, Tether Gold has the potential to become a popular investment option in the future.