Tether to Cease Operations of Gold-Linked aUSDT Stablecoin

The stablecoin issuer Tether has decided to terminate the operations of its platform Alloy by Tether and its aUSDT stablecoin tied to gold collateralisation after two years due to a lack of demand. This decision was made based on Tether's “strategic changes,” following a review of user activity, market demand and the company's “broader priorities, as the firm announced in a press release. As per the company, it has been decided that the organisation should channel its focus towards places where there is strong user demand, better liquidity, and greater market opportunity, such as its gold-based digital asset XAUT.

Tether Gives Users Until September 17 to Redeem aUSDT Holdings

Stablecoin business continues to be the core of Tether's operations, but it has been expanding its reach into technologies other than stablecoin. Among them are Bitcoin mining technology, artificial intelligence, cloud computing, and robotics. Lately, Tether participated in the $1 billion (roughly Rs. 9,437 crore) fundraising for German company NEURA on June 11. AUSDT of Tether is an over-collateralised derivative offering that uses the XAUT collateral tokens through Ethereum smart contracts. It is also a reflection of the demand for gold-backed and tokenised real-world assets. 

XAUT was used as a form of collateral for obtaining aUSDT via Alloy by Tether. XAUT deposited was worth more than aUSDT that could be minted, which is similar to the process of issuance of certain types of synthetic stablecoins in DeFi. Users could borrow or mint against their XAUT holdings, letting them access dollar-like liquidity without selling their gold exposure. 

The winding down process will take place in phases, and the first phase will begin right away by stopping any new positions from being opened or any new aUSDT coins from being minted. Users have a window of three months within which they can redeem their aUSDT and get back their XAUT before the deadline set for September 17. XAUT enjoys wide popularity and has a market cap of $3 billion (roughly Rs. 28,311 crore), and its backing includes 22,169 kg of physical gold. 

Tokenised gold funds have seen widespread adoption, one of the examples being OCBC, which is one of the largest banking and financial services corporations in Singapore. In April, the company announced the launch of a tokenised gold fund, with an underlying token called GOLDX, issued on both Ethereum and Solana. The launch was in partnership with Lion Global Investors and the digital asset exchange DigiFT. The bank stated that this token can be subscribed to using fiat or stablecoins, with allocations delivered directly to investors' blockchain wallets after purchase. As per the bank, the GOLDX token is meant for institutional investors, hedge funds, and asset managers.