Stablecoin issuer Tether has officially unveiled Alloy, a new synthetic dollar backed by gold. The company behind USDT, the world’s largest stablecoin, announced that the project would be the first “tethered asset,” which they described as “an innovative asset category designed to track a reference asset’s price,” through different facets.
The asset was developed by both Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., according to a recent press release. Moreover, both of the entities responsible for Alloy are key members of the company’s Tether Group.
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Tether Unviel’s Gold-Backed Synthetic Dollar
The finance market has seen both stablecoins and gold dominate discussions. Both are becoming a focal point for investors, with the latter growing exponentially since December of 2023. The metal has most recently reached an all-time high of $2,450 in May.
Now, the issuer of the world’s biggest stablecoin is getting in on the action. Indeed, Tether has announced the arrival of a new synthetic dollar that is backed by gold. Moreover, the development is poised to “redefine stability in the digital economy,” through the power of gold as an asset.
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The metal inherently comes with both stability, security, and reliability, which only feed its appeal. Subsequently, Tether is set to introduce a tethered asset to track the price of gold through “stabilization strategies,” in an innovative new approach.
The stablecoin issuer notes that the inaugural Alloy by Tether asset is aUSD₮. This will function to track the value of a single dollar. Additionally, aUSD₮ is set to be “over-collatralized,” by Tether Gold and supported by physical gold reserves that are housed in Switzerland. These synthetic dollars will be able to be created using Tether gold as collateral, the press release also noted.
