Tether’s New Platform Merges Dollars and Gold in Digital Asset

Tether, the issuer of the world’s largest stablecoin, is launching Alloy, a new digital asset platform that combines the stability of the U.S. dollar with the security of gold. The first token on the platform, aUSD₮, is backed by Tether Gold (XAU₮), physical gold reserves held in Switzerland.

Alloy, developed by Tether subsidiaries Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., introduces the concept of “tethered assets.” These assets are designed to track the value of reference assets like the U.S. dollar through over-collateralization and secondary market liquidity pools.

aUSD₮, the first token on the platform, is pegged to the U.S. dollar and backed by Tether Gold (XAU₮). This allows users to transact, pay, and send remittances using a digital currency that mirrors the stability of the U.S. dollar without having to sell their gold holdings.

Alloy operates on the Ethereum mainnet, using smart contracts to mint aUSD₮ tokens. Users can deposit Tether Gold as collateral, a process governed by Ethereum-compatible smart contracts. These contracts maintain the system’s integrity by continuously monitoring the collateralization ratio through price oracles.

The platform is designed to be open, allowing for the development of various tethered assets with different backing mechanisms, including potential yield-bearing products. This flexibility extends its use beyond individuals to institutional investors seeking a secure, gold-backed digital asset for their portfolios.

Paolo Ardoino, CEO of Tether, expressed his excitement about Alloy’s launch, emphasizing its role in blending digital innovation with the stability of gold-backed assets. He highlighted its potential impact on the market and hinted at future integrations within Tether’s tokenization platform.