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Ohidul Islam
Ohidul Islam

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Tether Debuts New 'Synthetic' Dollar Backed by Tokenized Gold

Tether, the company behind the USDT stablecoin, has unveiled a new synthetic dollar, Alloy, backed by gold. This innovative asset aims to combine the stability and familiarity of the US dollar with the enduring value of gold. The aUSDT token is designed to track the value of one US dollar, providing a stable unit of account while being backed by physical gold stored in Switzerland.

Key Features of aUSDT

1. Over-collateralization: aUSDT is over-collateralized by Tether Gold (XAU₮), ensuring that more value in gold is held as collateral than the value of the aUSDT tokens issued. This mechanism acts as a safety net, absorbing potential fluctuations in the value of the collateral asset, thereby ensuring stability and reliability.
2. Smart Contracts: The minting and management of aUSDT are handled through Ethereum-compatible smart contracts. These contracts ensure transparency and security by keeping track of all collateral and minted tokens, using price oracles to evaluate the mint-to-value (MTV) ratio constantly.
3. Gold Backing: aUSDT is backed by physical gold stored in Switzerland, providing a tangible asset to support the token's value.
4. Open Platform: Alloy by Tether is an open platform that will allow the creation of various Tethered Assets with broader backing mechanics, potentially including yield-bearing products. This flexibility enables users to create different types of assets tailored to their needs.

Purpose and Use Cases

1. Stable Unit of Account: aUSDT aims to provide the functional advantages of using the US dollar, such as its wide use in payments, trading, settlements, and savings, while incorporating the intrinsic benefits of gold, such as scarcity, low volatility, and preservation of purchasing power.
2. Gold-backed Transactions: aUSDT is designed for users who want to make transactions, payments, and remittances with a currency similar to the US dollar without having to sell their gold-backed digital assets.
3. Yield-bearing Products: The platform may eventually offer yield-bearing products, providing users with additional revenue streams.

Impact and Significance

1. Expansion Beyond USDT: The launch of aUSDT marks a significant expansion beyond Tether's USDT stablecoin, which has a market capitalization of $112 billion and tracks the value of the US dollar.
2. Gold-backed Stablecoin: aUSDT is not the first gold-backed stablecoin, but it is one of the most prominent and well-backed initiatives in the space.
3. Regulatory Scrutiny: The quality of assets backing stablecoins like USDT has come under intense scrutiny in recent years, with regulators concerned about the liquidity of the reserves backing them and if they could withstand mass redemption requests while under market pressure.


Tether's launch of aUSDT, a synthetic dollar backed by tokenized gold, marks a significant innovation in the stablecoin space. By combining the stability and familiarity of the US dollar with the enduring value of gold, aUSDT aims to provide a stable unit of account and a secure means of transactions. The platform's open architecture and potential for yield-bearing products make it an attractive option for users seeking a gold-backed digital asset.

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