Tether Launches First Gold-Backed Over Collateralized Asset

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As a researcher with a background in finance and digital currencies, I’m excited about Tether’s latest announcement of Alloy by Tether and the introduction of aUSDT. The ability to create synthetic digital assets collateralized by gold is a game-changer in the digital economy.

As a researcher, I’m excited to share that Tether, the issuer of the popular stablecoin USDT, has officially introduced Alloy by Tether. The initial offering in this new lineup is a stablecoin called aUSDT.

Tether Brings Real World Assets to Users 

In a recent update on the Tether blog, our CEO, Paolo Ardoino, explained that aUSDT, which is Tether’s stablecoin pegged to the US dollar, is backed by an over-collateralization of Tether Gold (XAUt). Essentially, each unit of aUSDT represents the value of one US dollar and is guaranteed by the value of more than one unit of XAUt held in reserve.

Alloy by Tether is a new token minting platform built on the Ethereum (ETH) network. Per its design, it allows users to create tokens collateralized by the firm’s tokenized gold. The plan is to integrate Alloy into Tether’s digital assets tokenization platform which will go live later this year.

Introducing aUSDT, the debut Tethered asset: a stablecoin representing the value of the U.S. dollar, backed by an equivalent amount of XAUt (digital gold) in collateral.

Using simple and clear language, The open platform called Alloy by Tether enables users to generate collateralized synthetic digital assets. Soon, these assets will join the offerings of Tether’s digital wallet (@Tether_to).

— Paolo Ardoino (@paoloardoino) June 17, 2024

Two entities within the Tether Group, Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., were responsible for creating an innovative gold-backed asset with a tethered connection.

This new advancement aims to revolutionize the concept of stability in the digital economy. It accomplishes this by merging the advantages of a dependable unit of account with the safety and trustworthiness of gold. Tether’s Alloy introduces a novel category of cryptocurrencies, referred to as Tethered assets. These innovative currencies are specifically engineered to mirror the value of underlying assets via diverse stabilization techniques.

One strategy involves using more collateral than necessary with easily convertible assets and secondary markets as backup. This innovative method ensures a reliable connection between the value of the underlying asset and its corresponding counterpart.

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

Tether Considers Users in its Expansion Plan 

As a researcher studying digital finance, I’ve discovered an intriguing innovation from Tether. They’ve introduced a feature that caters to users who prefer the tangible feel of traditional currencies for digital transactions, payments, and remittances. With this new development, users can execute these tasks without having to sell their XAUt (gold-backed stablecoins). This enhancement underscores Tether’s dedication to providing cutting-edge solutions for its clientele.

The company is actively looking to secure a billion dollars in funding for expanding into the fields of Artificial Intelligence (AI) and Biotechnology in the coming months. This move comes after their previous investment of two hundred million dollars in Blackrock Neurotech, a leading neural implant company, which competes with Elon Musk’s Neuralink.

Ultimately, the different additions reflects the firm’s diversification beyond stablecoins.

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2024-06-17 18:54