A press release published on Jan 23 revealed that Tether created a new product called Tether Gold (XAU₮), a stablecoin backed by physical gold. Tether claims that each individual token represents one troy fine ounce of physical gold on a specific gold bar.
XAU₮ is available both as an ERC-20 token on the Ethereum network and as a TRC20 token on the TRON blockchain. Additionally, the token can be transferred to any on-chain address from the buyer’s Tether wallet. According to the company, the new product is the only one amongst rivals to provide zero custody fees and to have direct control over physical gold storage.
The press release states that Tether stores its physical gold in a vault in Switzerland, which provides the best security and tools against modern threats. Tether also claims that, at the time, Tether Gold represents the best way to hold gold.
To swiftly improve adoption of the new gold-backed stablecoin, Tether urged all exchanges to add support for the token. At the time of writing, the Ethereum blockchain alone holds a supply of 4,000 tokens, which amounts to a $6.2 million market capitalization.
Bitfinex is the first to launch XAUT on its exchange and currently holds one quarter of the ERC-20 token supply. Since the exchange is closely related to Tether, it is normal that Bitfinex is the first to host the new gold-backed stablecoin on its platform.
Despite Tether’s court battle, instigated by the lack of USDT tokens covered by real money, the company decided in September 2019 that it would launch a range of commodity-based assets. In the latest court development, where prosecutors demanded that all three Tether lawsuits become consolidated into one, Tether stated:
“That (prosecutor’s) research deploys preselected data to retrofit a desired narrative and demonstrates a patent misunderstanding of the cryptocurrency market and the demand that drives purchases of Tether.”