Tether Launches Gold-Backed USD Stablecoin Alloy

The largest stablecoin issuer is offering a 2:1 bonus to USDT holders and has reserved 10 million USDT for this campaign.    

Key Takeaways
  

➔ Tether’s gold-backed stablecoin Alloy can be minted on the Tether platform.  

➔ The product is the first of its kind to be launched by Tether.  

➔ USDT is not the first synthetic dollar. In August 2022, Galoy launched Stablesats, a dollar-based synthetic on the Bitcoin Lightning Network.  

Tether is introducing a new gold-backed stablecoin called Alloy (aUSDT), which is also backed by the US dollar. This is Tether's first such asset. Alloy can be minted through the new Alloy by Tether platform.    

Alloy will be over-collateralised with Tether Gold (XAUt), a tokenised form of physical gold, but the US dollar will back the token. This makes Alloy a synthetic dollar that mimics the US dollar in value and usage, though it is not directly linked to the US dollar.    

According to an X post from Tether, tethered assets are “digital assets that aim to track the reference price of another asset through different stabilisation mechanisms.” Tether added that:    

“Alloy by Tether provides long-term holders the opportunity to maintain exposure to gold, while in parallel obtaining a dollar-referenced Tethered Asset for payments and day-to-day economy.”    

Stability and Flexibility with aUSDT
    

Tether also said that other tethered assets, including those that generate interest, can be launched on the same platform. To mint aUSDT, the user transfers XUSDT to a smart contract and price oracles. This enables them to buy things in aUSDT while holding gold-backed Tether assets.    

aUSDT was issued by Tether’s subsidiaries Moon Gold and Moon Gold El Salvador. According to Ardoino, it will be a component of a new real-world asset tokenisation platform to be rolled out in the second half of this year.    

Recommended Read: Tether’s Latest Milestone  

USDT is not the first synthetic dollar. In August 2022, Galoy launched Stablesats, a dollar-based synthetic on the Bitcoin Lightning Network. The idea got more traction when Ethena Labs launched USDe, an Ether-backed synthetic dollar, which generated some controversy when it was launched. In June, Asymmetry also unveiled an algorithmically stable synthetic dollar.    

Tether is offering a 2:1 bonus to USDT holders and has reserved 10 million USDT for this campaign.  One analyst has given aUSDT an edge over other stablecoins, such as USDe, because of its high liquidity and centralised management, which lowers risks.  

Apple has recently announced it would allow third-party access to the iPhone’s NFC-based Secure Element payment feature.  The change means that soon, iPhone users will be able to pay by tapping their phones, confirming the transaction with FaceID, and using blockchain to process the payment. If USDT is to use the opportunity, like its competitors are planning to, it will open massive opportunities for expansion in the $15.7 trillion-valued contactless payment sector.