Tether Launches First Gold-Backed Over Collateralized Asset

Tether Launches First Gold-Backed Over Collateralized Asset : Tether Launches Alloy by Tether with aUSDT as its First Token. On June 17, 2024, Tether, the issuer of the USDT stablecoin, announced the official launch of Alloy by Tether, a new tokenization platform. The flagship asset of this platform is aUSDT, a synthetic dollar token.

Tether Brings Real-World Assets to Users

Tether CEO Paolo Ardoino shared the news on social media, describing aUSDT as a synthetic dollar that is over-collateralized by Tether Gold (XAUt). Alloy by Tether is built on the Ethereum (ETH) network and allows users to create tokens backed by Tether’s tokenized gold. The plan is to integrate Alloy into Tether’s digital assets tokenization platform, which will go live later this year.

Two Tether Group members, Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., developed the Tether gold-backed asset. This innovation aims to redefine stability in the digital economy by combining the stability of a dollar with the reliability of gold.

Introducing Tethered Assets

Alloy by Tether introduces a new type of cryptocurrency known as Tethered assets. These assets are designed to track the price of reference assets through various stabilization strategies. One such strategy is over-collateralization with liquid assets and secondary market liquidity pools. This approach ensures consistent value and stability between the reference asset and its tethered counterpart.

For example, aUSDT is over-collateralized by Tether Gold but is designed to track the value of one US dollar. What makes it unique is that it is backed by physical gold stored in Switzerland. The aUSD₮ smart contract offers transparency to users by keeping track of all collateral and minted tokens. This is achieved using Price Oracles to constantly evaluate the Mint to Value (MTV) ratio.

User Benefits and Future Plans

Tether emphasized that this new development is particularly useful for users who want to perform digital transactions, payments, and remittances but prefer a currency they are familiar with. Users can complete such transactions without needing to sell their XAUt. This innovation highlights Tether’s commitment to offering new and useful products to its users.

Tether is also looking to expand further. The company is seeking a $1 billion investment to facilitate its venture into the Artificial Intelligence (AI) and Biotechnology sectors. This follows its recent $200 million investment in Blackrock Neurotech, a neural implant firm that rivals Elon Musk’s Neuralink.

Conclusion

The launch of Alloy by Tether and the introduction of aUSDT reflect Tether’s ongoing diversification beyond stablecoins. This new tokenization platform aims to combine the stability of traditional currencies with the security of gold, offering users a unique and innovative financial tool. As Tether continues to expand into new sectors, it remains committed to providing cutting-edge solutions to its users in the digital economy.

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