The company behind the most valuable stablecoin in the market is set to introduce a new digital asset backed by physical gold.

Tether, the issuer of USDT, has unveiled aUSDT, a digital asset supported by over-collateralized Tether Gold (XAUT). This new offering is part of a fresh lineup called Alloy by Tether.

Alloy by Tether is introducing a unique category of digital assets known as tethered assets. These assets are designed to mirror the value of reference assets by utilizing strategies such as over-collateralization with liquid assets and secondary market liquidity pools. This approach ensures stability and consistent value alignment between the reference asset and its tethered counterpart.

The announcement states that aUSDT is backed by physical gold reserves stored in Switzerland. The smart contracts for Alloy by Tether are currently operational on the Ethereum (ETH) network, allowing users to generate aUSDT using Tether Gold as collateral.

Tether CEO Paolo Ardoino expressed excitement about this innovative solution, highlighting its unique stabilization mechanism compared to traditional options like USDT. He also mentioned plans to integrate this technology into their upcoming digital asset tokenization platform.

This announcement follows recent data from Kaiko Analytics suggesting that competitors of stablecoins are gradually reducing Tether’s market dominance.

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