Tether Launches Synthetic Stablecoin Alloy

Tether unveiled Alloy (aUSDT), a new stablecoin backed by the Tether Gold token (XAUt) and pegged to the U.S. dollar.

Tether announced the release of a new stablecoin backed by gold and pegged to the U.S. dollar. The new token, dubbed Alloy (aUSDT), will be available for minting on the Alloy by Tether platform.

According to a company statement, the Alloy stablecoin will be overcollateralized by the Tether Gold token (XAUt), which provides ownership of physical gold. aUSDT will be pegged to the U.S. dollar. Given that, the new token can be considered a synthetic dollar that reproduces the value and functionality of the dollar without actually being backed directly by fiat currency.

Synthetic assets in the cryptocurrency market refer to tokens that reproduce the price of another asset through various stabilization mechanisms, algorithms, and smart contracts. They involve using digital assets that aren’t directly linked to the underlying asset as financial collateral.

The Alloy by Tether platform will allow long-term holders to maintain exposure to gold while offering a dollar-referenced asset for everyday payments. In the future, other stablecoin-based assets, including yield-based financial products, will also be available on the platform. According to Paolo Ardoino, CEO of Tether, Alloy by Tether will be part of the real-world asset (RWA) tokenization platform scheduled to launch later this year.

Users can mint aUSDT via smart contracts and price oracles by depositing XAUt tokens. The Alloy smart contract is deployed on the Ethereum blockchain. The new asset is developed and managed by Moon Gold and Moon Gold El Salvador, subsidiaries of Tether licensed by the National Commission for Digital Assets of El Salvador (CNAD).

Tether is actively developing various crypto initiatives, including the launch of the Tether Edu educational arm and the opening of its mining facilities. Besides, the company is expanding the possibilities of using its stablecoins as payment instruments and is actively minting new coins.

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