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Tether Gold (XAU₮) – Digital Asset Pegged to Physical Gold

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Tether Gold (XAU₮) - Digital Asset Pegged to Physical Gold

This week, the crypto market saw a major development after the world’s largest stablecoin provider, Tether Ltd announced the launch of its highly-anticipated Tether Gold (XAU₮) token. Tether currently dominates the stablecoin market with a market cap of over $4.6 billion. Now, the firm seeks to transform the gold-backed token arena in much the same way.

News first broke via a post from Tether’s management team. In the post, the firm spoke on Tether’s proven track record for product innovation in the sector. Also, developers discussed the new XAU₮ token and its functionality. Specifically, the post clarified that XAU₮ represents ownership of one troy fine ounce of physical gold on a specific gold bar.

Tether Gold (XAU₮)

As part of the Tether Gold strategy, executives decided it was better to maintain direct control over the physical gold storage. As such, the gold represented by XAU₮ resides in a high-security vault in the country of Switzerland. The post explains that users don’t have to fear the loss of their physically-tethered gold because the vault incorporates best in class security systems coupled with advanced anti-threat measures. In order to make this monumental task a reality, Tether chose to partner with a long-time precious metals trader. For their part, this UK-licensed firm provided the gold for tokenization.

Tether Gold via Company Website

Tether Gold via Company Website

Tether Gold (XAU₮) Tokens

Interestingly, Tether decided to go with a multi-blockchain approach to the market. Currently, XAU₮ tokens are to release in two different coding formats. XAU₮  is available in both ERC-20 tokens on the Ethereum (ETH) blockchain and TRC-20 tokens that live on the TRON network. Importantly, both types of XAU₮ are compatible with the current batch of Tether (USDT) wallets. In this way, XAU₮ tokens can transfer to any supported on-chain address without issues.

Tether Gold (XAU₮) Strategy

As part of Tethers XAU₮ unveiling, the firm made a couple of other important announcements regarding the token. Firstly, XAU₮ is to be the only gold-backed token to not charge custody fees. Notably, this decision improves the profitability of the token. Also, XAU₮ investors get access to a 24-hour dedicated customer support team. As it stands today, developers have not listed what exchanges will support XAU₮. However, developers did invite any interested exchanges to reach out for more details on how to list the token in the future.

Tether Gets Golden

Tether once changed the cryptomarkets forever, and now, it looks as if the firm is ready to do it again. It will be interesting to see exactly how Tether manages and audit this latest venture. In the past, the firm has run into issues regarding its Tether stablecoin accounting practices. Hopefully, the firm learned from those mistakes. For now, the entire cryptocommunity awaits the launch of this unique gold-backed stablecoin.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

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