Tether Debuts New 'Synthetic' Dollar Backed by Tokenized Gold in Tokenization Push

As a seasoned crypto investor with a keen interest in stablecoins and new developments in the digital asset space, I’m excited about Tether’s latest announcement. The debut of Alloy on the Ethereum network is an intriguing step for this $110 billion stablecoin issuer.

Tether, the organization managing the $110 billion stablecoin USDT, introduced a fresh token generation platform named Alloy on the Ethereum network on Monday. Alloy enables users to manufacture new tokens, secured by Tether’s tokenized gold (XAUT), within this system.

As a crypto investor, I’d rephrase it as follows: “I, as a user of Alloy by Tether, will soon be able to create collateralized synthetic digital assets on this open platform. This new feature is part of the upcoming Tether digital asset tokenization platform, set to launch later in the year, according to Paolo Ardoino, CEO of Tether. There’s also a possibility that yield-bearing products will be introduced on the platform in the future, as mentioned in a recent press release from Tether.”

As a crypto investor, I would explain it this way: The initial asset you can find on the platform is aUSDT, which is linked to the value of the U.S. dollar. To obtain aUSDT, investors can deposit XAUT as collateral and mint it. It’s important to note that XAUT, with a market capitalization of $570 million, is backed by physical gold worth over half a billion dollars, as stated by Tether, and kept in secure vaults in Switzerland.

The aUSDT token is targeted for users who want to use crypto for payments and remittances without selling their gold-backed tokens, the press release explained. The position needs to be overcollateralized, meaning that the amount of new tokens users can mint is maximized at 75% of the collateral value.

Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V. are responsible for overseeing the issuance of assets, with this process being governed by El Salvador’s National Commission of Digital Assets (CNAD).

As a researcher examining Tether’s latest developments, I can share that this innovative firm is extending its reach beyond just issuing USDT, the leading stablecoin by market value and a crucial foundation of the digital asset sector. Lately, Tether has made strategic investments in various domains to diversify its offerings. These new initiatives encompass Bitcoin (BTC) mining, payment processing, and artificial intelligence (AI) through cloud computing.

In April, Ardonio announced intentions to introduce a tokenization platform. This platform aims to make it easier for various types of assets such as bonds, stocks, investment funds, and loyalty rewards to be converted into digital form.

2024-06-17 17:33

Tether Debuts New ‘Synthetic’ Dollar Backed by Tokenized Gold in Tokenization Push

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