Tether plans Gold-backed loans with Ledn using XAUT

$USDT issuer Tether and crypto lender Ledn have laid out plans to let holders of Tether Gold (XAUT) borrow against the it later in the year, which would open a lending channel taking advantage of the stablecoin issuer’s $23 billion physical gold reserve.

Tether partners with Ledn

Lending platform Ledn announced it will add XAUT to its platform alongside Bitcoin (BTC) and Tether’s dollar-pegged stablecoin $USDT. This is expected to go live before the end of 2026, and would let XAUT holders use their holdings as collateral for loans instead of selling off the gold they own.

Each XAUT token represents one troy ounce of physical gold stored in Swiss vaults, according to Tether.

The structure of this product mirrors Ledn’s handling of bitcoin-backed lending for the past few years. Client collateral is held on a 1:1 basis and is not lent out or used to generate yield, the company said.

Gold-backed lending has been controlled by central banks, large financial institutions, and bullion dealers since forever. Tether and Ledn’s partnership is betting on bringing the same concept on-chain, giving holders access to liquidity without forcing the sale of their gold assets.

“As digital assets become an increasingly important part of the global economy, demand is growing for solutions that combine long-term ownership with financial flexibility,” Tether CEO Paolo Ardoino said in a statement.

Tether expands past the dollar

Profits from $USDT, the world’s largest stablecoin, have funded expansion into areas well beyond dollar-pegged tokens.

The company has invested in precious metals marketplace Gold.com, partnered with crypto financing firm Antalpha on XAUT lending and physical redemption, and has also backed AI infrastructure provider Northern Data. Tether has also put massive amounts of capital into bitcoin mining and multiple renewable energy projects.

The lending product backed by Tether’s physical gold reserves is expected to expand Ledn’s collateral options beyond its current supported assets.

As at the time of writing, XAUT traded at $4,070.34 per token.