Tether introduces Alloy by Tether Gold: A New Era of Stability in Digital Assets

Tether, the largest company in the sector, proudly announces the official launch of Alloy by Tether.

This innovative product represents a new category of tethered assets, backed by Tether Gold. Developed by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., both members of the Tether Group, "Alloy by Tether aims to redefine stability in the digital economy by combining the reliability of gold with the stability of a stable unit of account," reported the company!

What is Alloy by Tether?

Alloy by Tether introduces tethered assets, a novel type of digital asset designed to track the value of reference assets through stabilization strategies.

These include over-collateralization with liquid assets and the use of secondary market liquidity pools, ensuring consistent value and stability between the reference asset and its tethered counterpart.

Meet aUSD₮: The First Token in the Alloy Lineup

The first token of Alloy by Tether is aUSD₮, a digital currency designed to mirror the value of one US dollar. What sets aUSD₮ apart is its over-collateralization by Tether Gold (XAU₮), meaning it is backed by real physical gold stored securely in Switzerland.

Users can create aUSD₮ tokens by using Tether Gold (XAU₮) as collateral, allowing them to engage in digital transactions, payments, and remittances with a currency that feels as familiar as the US dollar, without needing to sell their XAU₮.

How Does aUSD₮ Work?

Currently, Alloy by Tether smart contracts are deployed on the Ethereum Mainnet. Users can mint aUSD₮ by depositing Tether Gold (XAU₮) as collateral through a process managed by Ethereum-compatible smart contracts.

These smart contracts ensure transparency, tracking all collateral and minted tokens, and utilising Price Oracles to constantly evaluate the Mint to Value (MTV) ratio.

A Modern Approach to Asset Management

Alloy by Tether is an open platform, allowing for the creation of various tethered assets with diverse backing mechanics, potentially including yield-bearing products.

"This technology offers a modern approach to asset management, providing institutions with a secure, gold-backed digital asset that can be seamlessly integrated into portfolios. The issuance and management of Alloy by Tether will be handled by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., both authorised by the CNAD in El Salvador, catering to various customer segments and regulatory requirements," said Tether in the official statement.

A Message from Tether’s CEO

“We are thrilled to announce the launch of Alloy by Tether, introducing a class of digital assets backed by gold and tethered to a reference fiat currency,” said Paolo Ardoino, CEO of Tether.

“While the stabilization mechanism is different compared to traditional options like USD₮, this innovative solution marks an exciting milestone, and we eagerly anticipate how it will interact with the rest of the market. Moreover, we plan to make this innovative technology available in our upcoming digital asset tokenisation platform as well.”