Tether Introduces GoldBacked Synthetic Dollar Stablecoin

Tether Introduces Alloy, a Gold-Backed Stablecoin Linked to the US Dollar
Tether recently unveiled Alloy, a stablecoin backed by gold and pegged to the US dollar. This release marks the debut of Tether’s tethered asset, with Alloy (aUSDT) being able to be created through the new platform.
These tethered assets are specifically designed to mirror the price of a particular reference asset, such as the US dollar, by employing stabilization methods like over-collateralization. This strategy involves holding collateral worth more than the assets issued, along with maintaining liquidity in the secondary market.
Alloy will be backed by Tether Gold (XAUt), a token representing physical gold ownership, ensuring that its value remains tied to the US dollar. Essentially, Alloy is considered a “synthetic” dollar, striving to replicate the value and utility of the US dollar without direct backing, meaning it is not backed dollar-for-dollar.
Tether Partners with El Salvador for aUSDT Launch
The initial asset available on the platform is Alloy, which maintains a stable value linked to the US dollar. Investors can create the token by using Tether Gold as collateral. Tether Gold, supported by physical gold stored in Switzerland, currently has a market capitalization of $570 million.
Alloy is targeted towards individuals interested in utilizing cryptocurrency for transactions and remittances while holding onto their gold-backed tokens without needing to sell them. Users will need to overcollateralize their positions to be able to mint new tokens up to 75% of the collateral value.
Additionally, Moon Gold NA and Moon Gold El Salvador will supervise the asset’s issuance under the oversight of El Salvador’s National Commission of Digital Assets (CNAD).
This development comes on the heels of a public disagreement in May, where Tether’s CEO Paolo Ardoino addressed concerns raised by Ripple’s CEO regarding potential government intervention against Tether. Interestingly, Ripple hinted at the introduction of its own competing stablecoin in June.