Stablecoin issuer Tether announced on Monday (17th) the launch of a new digital asset supported by a gold token Tether Gold (XAU₮) called Alloy by Tether, aiming to redefine stability in the digital economy by combining the advantages of stable accounting units and the security and reliability of gold.
Alloy by Tether introduces a new type of digital asset category called “Tethered Asset”, designed to track the price of the underlying asset through stability strategies (such as excess collateral in liquid assets and secondary market liquidity pools) to provide consistent value and stability between the underlying asset and its tethered counterpart.
aUSD₮ is the first Alloy by Tether token. It is designed to track the value of one US dollar, backed by Tether Gold (XAU₮), meaning it is supported by physical gold stored in Switzerland. Users can use XAU₮ as collateral to create aUSD₮ tokens. Tether stated that:
Currently, the Alloy by Tether smart contract has been deployed on the Ethereum mainnet, allowing users to deposit XAU₮ as collateral through a process managed by an Ethereum-compatible smart contract to mint aUSD₮. The aUSD₮ smart contract continuously evaluates the Minting Token Value (MTV) ratio by tracking all collateral and minted tokens and using a price oracle to ensure transparency.
Tether CEO Paolo Ardoino explained on the X platform that aUSDT is a synthetic US dollar over-collateralized by XAUt, and Alloy by Tether is an open platform that allows users to create collateralized synthetic digital assets, which will soon be part of the new Tether digital asset tokenization platform to be launched later this year.