Tether, the company known for its $110 billion stablecoin (USDT), has introduced a new token minting platform called Alloy on the Ethereum network. This platform enables users to create tokens that are collateralized by Tether’s tokenized gold (XAUT).
Paolo Ardoino, the CEO of Tether, shared in a post that Alloy by Tether is an open platform that allows the creation of collateralized synthetic digital assets. This platform will soon be integrated into the new Tether digital assets tokenization platform, set to launch later this year. Tether has hinted that the platform may offer yield-bearing products in the future.
The first asset available on the Alloy platform is aUSDT, which is pegged to the U.S. dollar. Investors can mint aUSDT by depositing Tether’s XAUT as collateral. XAUT, backed by physical gold stored in Switzerland, has a market capitalization of $570 million.
The aUSDT token is designed for users who wish to use cryptocurrency for payments and remittances without needing to sell their gold-backed tokens. It’s important to note that the position needs to be overcollateralized, meaning that the amount of new tokens users can mint is capped at 75% of the collateral value.
Asset issuance for the platform will be handled by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., both regulated under El Salvador’s National Commission of Digital Assets (CNAD).
This new offering from Tether comes as part of the company’s efforts to expand its services beyond issuing USDT, the largest stablecoin in terms of market value and a key player in the digital asset market. Tether has recently diversified its investments into bitcoin mining, payment processing, and artificial intelligence through cloud computing.
Ardoino had previously announced plans in April to launch a tokenization platform that would facilitate the creation of digital versions of various assets such as bonds, stocks, funds, and loyalty reward points.
This move by Tether signifies the company’s commitment to innovation and growth in the cryptocurrency space, providing users with new opportunities to engage with digital assets backed by tangible assets like gold. As the digital asset market continues to evolve, Tether’s initiatives aim to meet the changing needs and demands of users looking for secure and reliable options in the crypto ecosystem.