By Key Points
- Tether introduces Alloy by Tether, backed by Tether Gold
- aUSD₮ token offers gold-backed stability with dollar equivalence
- Innovative tethered assets to enhance the digital economy
- Issued by Moon Gold NA and Moon Gold El Salvador
In a groundbreaking move, Tether has launched a new digital asset named Alloy by Tether, aiming to bring a novel approach to stability in the digital economy. This innovation combines the strengths of a stable unit of account with the security and reliability of gold. The initiative represents a significant advancement in the realm of digital currencies and asset-backed tokens.
Alloy by Tether: A New Era of Digital Assets
Alloy by Tether is a pioneering step towards a new category of digital assets known as “tethered assets.” These assets are designed to track the price of reference assets through various stabilization strategies, including over-collateralization with liquid assets and secondary market liquidity pools. This methodology ensures a consistent value and stability between the reference asset and its tethered counterpart.
The first token in this innovative lineup is aUSD₮, a digital currency designed to match the value of one U.S. dollar. However, what sets aUSD₮ apart is its backing by Tether Gold (XAU₮), meaning each token is supported by real physical gold stored in Switzerland.
This over-collateralization provides users with a secure, gold-backed currency for digital transactions, payments, and remittances without needing to liquidate their gold holdings.
To mint aUSD₮ tokens, users must use Tether Gold (XAU₮) as collateral. The process is managed through Ethereum-compatible smart contracts, ensuring transparency by tracking all collateral and minted tokens.
Price Oracles play a crucial role in maintaining the Mint to Value (MTV) ratio, further enhancing the transparency and stability of the system.
Tether, the world’s largest stablecoin, introduces a new gold-backed synthetic dollar. pic.twitter.com/ABAVbwCoZq
— BULLSTREET GROUP (@Bullstreetgroup) June 17, 2024
Expanding Horizons with Tethered Assets
Alloy by Tether represents an open platform that enables the creation of various tethered assets backed by broader mechanics. This opens the door to potential yield-bearing products and a modern approach to asset management, particularly for institutional investors.
These innovations offer secure, gold-backed digital assets that can seamlessly integrate into existing portfolios, providing a new level of financial flexibility and stability.
Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., both authorized by El Salvador’s digital asset regulatory body CNAD, will manage the issuance and regulatory compliance of Alloy by Tether.
This ensures that the asset meets different customer segments and regulatory requirements, maintaining trust and reliability in the new digital economy.
Paolo Ardoino, CEO of Tether, expressed excitement about this launch, stating that Alloy by Tether introduces a class of digital assets tethered to both gold and a reference fiat currency.
He also hinted at the future availability of this technology in Tether’s upcoming digital asset tokenization platform.
This development follows Tether’s recent achievement of surpassing $100 billion in circulation with its dollar-backed stablecoin. These tokens have facilitated easy fund transfers across crypto trading platforms without relying on traditional banking systems, underscoring Tether’s role in revolutionizing digital finance.
What's your reaction?
