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Tether Introduces aUSDT: A Gold-Backed, Dollar-Pegged Stablecoin

Key Takeaways

  • Tether's new platform, Alloy by Tether, introduces the aUSDT token, over-collateralized by Tether Gold (XAUt) and pegged to the US dollar;
  • Users can mint aUSDT by depositing XAUt via smart contracts and price oracles;
  • Alloy will integrate into a digital asset tokenization platform launching later this year.
Tether Introduces aUSDT: A Gold-Backed, Dollar-Pegged Stablecoin

Tether has unveiled a new platform called Alloy by Tether, introducing the aUSDT token.

This stablecoin is over-collateralized by Tether Gold (XAUt), a token representing physical gold ownership, yet its value will be pegged to the US dollar. This means the new token acts as a synthetic dollar, mirroring the value and functionality of the US dollar without direct backing.

aUSDT is a tethered asset, which are digital assets designed to track reference asset prices through over-collateralization and secondary market liquidity pools.

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Users can mint aUSDT by depositing XAUt through a smart contract and price oracles, allowing transactions with aUSDT while retaining their gold-backed Tether asset.

Alloy was developed by Tether subsidiaries Moon Gold and Moon Gold El Salvador and will be integrated into a digital asset tokenization platform set to launch later this year, according to Tether CEO Paolo Ardoino.

While aUSDT is Tether's first tethered asset, the concept of a synthetic dollar is not new. In February, Ethena Labs introduced USDe, an Ether-backed, dollar-pegged synthetic dollar.

Founder of clusters.xyz, @0xfoobar, compared aUSDT to USDe and other stablecoins, citing Tether's high liquidity and centralized control, which leads to "smarter decision-making and less principal-agent risk."

Tether's launch of Alloy marks a significant advancement in the stablecoin market, combining the value stability of the US dollar with the security of gold backing, offering users a versatile financial tool for various economic activities.

Aaron S. , Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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