Tether has announced the launch of a new gold-backed stablecoin, Alloy (aUSDT), pegged to the U.S. dollar. This is the first asset of its kind issued by Tether, designed to offer the stability of the U.S. dollar combined with the value of physical gold. Alloy can be minted on Tether’s new platform, Alloy by Tether.
According to Tether, Alloy will be overcollateralized by Tether Gold (XAUt), a token that represents ownership of physical gold. However, the new coin will be pegged to the U.S. dollar, functioning as a synthetic dollar. This means it is intended to mimic the value and usability of the U.S. dollar without being directly backed by it.
Tethered Assets Explained
In a post on X (formerly Twitter), Alloy explained that tethered assets are “digital assets that aim to track the reference price of another asset through different stabilization mechanisms.” Alloy by Tether aims to give long-term holders a chance to maintain exposure to gold while also obtaining a dollar-referenced asset for daily transactions.
Tether hinted that the platform could eventually support other tethered assets, including yield-bearing products. The synthetic dollar (aUSDT) can be minted by depositing XUSDT through a smart contract and price oracles, allowing users to transact with aUSDT while keeping their gold-backed Tether asset.
Tether’s Development and Future Plans
aUSDT was developed by Tether’s subsidiaries, Moon Gold and Moon Gold El Salvador. Tether CEO Paolo Ardoino stated that Alloy by Tether will be part of a broader real-world asset tokenization platform launching later this year.
Tether’s aUSDT is not the first synthetic dollar. In August 2022, Galoy introduced Stablesats, a Bitcoin-based synthetic dollar on the Lightning Network. The concept gained more attention when Ethena Labs launched USDe, an Ether-backed, dollar-pegged synthetic dollar, in February. In June, Asymmetry presented a variation with an algorithmically balanced synthetic dollar.
One analyst has praised aUSDT, comparing it favorably to other stablecoins like USDe due to Tether’s high liquidity and centralized control, which reduces principal-agent risk. To encourage adoption, Tether is offering USDT holders a bonus at a 2:1 ratio, setting aside 10 million aUSDT for this purpose.
