Tether Launches Gold-Backed Digital Asset Alloy

Tether Launches Gold-Backed Digital Asset Alloy

Tether, the world's largest stablecoin issuer, has introduced a new gold-backed digital asset called "Alloy" through its subsidiary Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador. The first token under this initiative, aUSD₮, is pegged to the U.S. dollar and over-collateralized with Tether Gold (XAU₮), which is backed by physical gold stored in Switzerland. The token creation process is managed through smart contracts on the Ethereum network, ensuring transparency and consistency in value.

The launch of Alloy marks the beginning of a new class of digital assets termed "tethered assets," designed to mirror the value of reference assets using stabilization mechanisms such as over-collateralization with liquid assets and secondary market liquidity pools. Tether aims to simplify gold transactions for financial institutions and enhance value stability in the digital economy. The company plans to integrate Alloy into its forthcoming digital asset tokenization platform and has announced a commitment to invest $1 billion in startups by 2025, focusing on areas including education, artificial intelligence, data, and Bitcoin mining.

Summary

Other news in finance