Coinfeeds Daily → Tether Launches Gold-Backed Digital Asset 'Alloy'

Tether Launches Gold-Backed Digital Asset 'Alloy'

Published: Jun 18, 2024 | Last Updated: Jun 18, 2024
Howard Kane
Gold on chain
Image: Gold on chain

Combining gold's stability with digital currency benefits, Tether's Alloy offers aUSD₮, a token pegged to the U.S. dollar and over-collateralized by Tether Gold.

Tether, a prominent player in the digital currency space, has introduced a new gold-backed digital asset called Alloy. This innovative platform aims to combine the stability of gold with the benefits of digital currencies, offering a unique solution for investors and institutions alike.

What is Alloy?

Alloy is a new product line created by Tether, in collaboration with Moon Gold NA and Moon Gold El Salvador, both part of the Tether Group. The platform allows users to mint digital assets that are backed by tokenized gold, specifically Tether Gold (XAUT). The first token available on this platform is aUSD₮, a token pegged to the U.S. dollar and over-collateralized by Tether Gold.

How Does It Work?

Users can mint aUSD₮ on the Ethereum mainnet by depositing Tether Gold (XAUT) as collateral. This process ensures that the digital asset is backed by a stable and valuable commodity—gold. The over-collateralization aspect means that the value of the collateral exceeds the value of the minted tokens, providing an extra layer of security and stability.

Regulation and Oversight

The issuance of assets on the Alloy platform is regulated under El Salvador's CNAD (National Commission for Digital Assets). This regulatory oversight aims to ensure transparency and trust in the new digital assets being created.

Future Prospects

Tether's CEO, Paolo Ardoino, referred to aUSD₮ as a "synthetic dollar," highlighting the platform's openness to collateralized digital assets. The launch of Alloy is part of Tether's broader tokenization efforts, which aim to provide more stable and secure digital currency options for various financial activities, including transactions, payments, and remittances.

In summary, Tether's new Alloy platform represents a significant step forward in the integration of traditional assets like gold with the innovative world of digital currencies. By offering a stable, gold-backed digital asset, Tether aims to provide a reliable and flexible financial tool for both individual investors and institutions.


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