Tether Launches Alloy by Tether: A Gold-Backed Digital Asset for Enhanced Stability

In a significant development within the cryptocurrency industry, Tether, the largest company in the sector, has announced the official launch of Alloy by Tether. This innovative product is a tethered asset backed by Tether Gold (XAU₮) and aims to enhance stability in the digital economy by merging the reliability of gold with the benefits of digital assets.

Alloy by Tether is developed by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., both subsidiaries within the Tether Group. The new product line introduces a unique category of digital assets designed to maintain consistent value by tracking the price of reference assets through advanced stabilization mechanisms. These mechanisms include over-collateralization with liquid assets and secondary market liquidity pools.

The inaugural token in the Alloy by Tether series is aUSD₮, a digital currency pegged to the value of one US dollar. Unlike traditional stablecoins, aUSD₮ is over-collateralized by Tether Gold (XAU₮), meaning it is backed by physical gold stored in Switzerland. This provides a robust and secure foundation for the token, ensuring its stability and reliability.

Users can mint aUSD₮ tokens by depositing Tether Gold (XAU₮) as collateral, allowing them to engage in digital transactions, payments, and remittances using a currency as familiar as the US dollar without selling their XAU₮. Alloy by Tether smart contracts are currently deployed on the Ethereum Mainnet, facilitating the minting process through Ethereum-compatible smart contracts. These contracts maintain transparency by tracking all collateral and minted tokens, using Price Oracles to continually assess the Mint to Value (MTV) ratio.

Alloy by Tether also serves as an open platform for creating various tethered assets with broader backing mechanisms, potentially including yield-bearing products. This innovative approach offers a modern solution for asset management, providing institutions with a secure, gold-backed digital asset that can be seamlessly integrated into investment portfolios. The issuance and management of Alloy by Tether will be overseen by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., both authorized by the CNAD in El Salvador.

Paolo Ardoino, CEO of Tether, expressed his enthusiasm for the launch: "We are thrilled to introduce Alloy by Tether, a class of digital assets backed by gold and tethered to a reference fiat currency. This innovative solution marks an exciting milestone, and we eagerly anticipate its impact on the market. Additionally, we plan to incorporate this technology into our upcoming digital asset tokenization platform."