June 18, 2024 12:56 CEST
| 1 min read
Tether launched on Monday, June 17 Alloy, a stablecoin backed by gold and pegged to the US dollar. This marks the debut of Tether as an issuer of tied assets, with Alloy (aUSDT) which can be minted through the new platform.
As the company stated:
“Restricted assets are designed to track the price of a specific reference asset, such as the US dollar.”
To this end they use stabilization techniques such as overcollateralization. This involves holding collateral with a value greater than that of the assets issued, along with secondary market liquidity.
A token representing ownership of physical gold, Tether Gold (XAUt), will support Alloy. Its value will be maintained against the US dollar.
Essentially, Alloy is classified as a “synthetic dollar”, with the goal of replicating the value and utility of the US dollar without direct backing. This means there is no direct support for the dollar.
Tether leverages El Salvador’s regulatory expertise to issue aUSDT
The first asset offered on the platform is Alloy, which maintains a stable value linked to the US dollar. Investors can obtain the token by depositing Tether Gold as a guarantee.
Backed by physical gold held in Switzerland, Tether Gold It has a market capitalization of $570 million.
Alloy is aimed at users interested in using cryptocurrencies for payments and remittances, holding gold-backed tokens without liquidating them.
Users must overcollateralize their positions, which allows them to mint new tokens up to 75% of the collateral value.
Furthermore, Moon Gold NA And Moon Gold El Salvador will oversee the issuance of the asset, operating under the National Digital Asset Commission (CNAD) of El Salvador.
Notably, the move comes after a public spat in May. At the time, Tether’s CEO, Paolo Ardoino, had addressed the concerns of the CEO of Ripple regarding potential government action against Tether.
It is interesting to note that Ripple announced the launch of its own stablecoin competitor in June.
