Tether, the company behind the popular USDT stablecoin, has launched a new gold-backed digital asset called Alloy.
Tether now ventures beyond its core business of stablecoins pegged directly to fiat currencies.
Alloy: like gold and dollar together, but better
The first product on the Alloy platform is aUSDT, a digital token pegged to the US dollar.
Unlike USDT, which is backed by reserves in US dollars, aUSDT is backed by Tether Gold, the XAUT. This combines the traditional value of gold with the convenience of a digital currency.
Come and bring your gold!
The aUSDT is designed to be stable, as it’s over-collateralized by Tether Gold.
This means the value of the gold backing the tokens is greater than the value of the aUSDT tokens in circulation.
Users can directly create new aUSDT tokens by depositing Tether Gold as collateral on the Ethereum blockchain.
The Alloy platform goes beyond aUSDT, because it also allows for the creation of various “tethered assets”, like the stablecoins or synthetic asstes, backed by another, different assets, potentially opening up new possibilities for managing investments.
Tether rocks
Tether CEO Paolo Ardoino sees this launch as a major development, and he highlights Alloy’s innovative approach and its potential impact on the cryptocurrency market. Positive impact, of course.
Additionally, he shared the company plans to integrate this technology into its upcoming digital asset tokenization platform.
This launch comes in a busy year for Tether. The company recently announced a $1 billion investment initiative in startups by 2025, and they’re also expanding beyond crypto, focusing on education, artificial intelligence, data, and even Bitcoin mining.
This all follows Tether’s record-breaking profits in the first quarter of 2024.
