Tether Gold (XUAT) is an ERC-20 digital asset designed to represent physical gold. One XAUT token is backed by one fine troy ounce (t oz) of gold from a London Good Delivery gold bullion bar stored in Switzerland. XUAT tokens can be fractionalized up to six decimal places.

 Tether, the company behind Tether Gold, was created in October 2014 by bitcoin enthusiasts. The company identified the volatility of new cryptocurrencies and the need to address this issue. As such, the company was created to link the utility of digital assets to the price stability of fiat currencies and other real-world assets. It launched the world’s first stablecoin, Tether (USDT), a token anchored to the value of USD. Tether Gold launched in 2020 in an attempt to link the transactional utility of digital coins with the price stability of gold.

What are XUAT’s key features and how does it work?

When users invest in XAUT they are automatically allocated specific gold bars held in the vault in Switzerland. By entering their Ethereum address on the Gold Tether platform, XAUT holders can identify their specifically allocated gold bar and are provided with its physical characteristics.

There are several redemption options. Holders can redeem their physical gold bars by following a verification process and the payment of redemption fees. In addition, they must hold the required minimum number of XAUt tokens, enough to redeem an entire gold bullion bar. The holder’s gold bar is delivered to an address in Switzerland of their choice. Otherwise, a holder can request that TG Commodities Limited attempt to sell their gold and then take the sale proceeds.

What is noteworthy about Tether Gold?

By tokenizing gold, cryptocurrency investors are offered the benefits of physical and digital assets without some of their associated drawbacks. Notably, XAUt holders benefit from their gold being stored in secure vaults without the need to expense the high costs of storage themselves.

Since XAUT is pegged to the price of gold, crypto investors are also offered the security of buying a digital asset pegged to the most stable real-world asset whose long-term value has been proven throughout human history. In comparison to many cryptocurrencies that have thus far proven to be relatively volatile, this offers high levels of stability. Even when compared to stablecoins backed by fiat-tenders, gold-backed stablecoins provide higher price stability.

As well as being expensive, buying real gold can be logistically challenging with low portability levels. Meaning it involves a relatively long process to trade, making it accessible to only a relatively small number of individuals and corporations equipped to face portability issues associated with the trade of gold. XAUT aims to overcome this. As such, by digitalizing gold, many more individuals can quickly buy and trade the asset. As an ERC-20 token, XAUT is extremely accessible, exposing more individuals to gold. This is particularly significant for individuals living in countries with unstable fiat tenders, as anyone, anywhere in the world, at any time can hold XAUT tokens and the associated gold, as a hedge against financial instability.

Purchases on the platform are exclusively made in US Dollars and the minimum allowed purchase is 50 XAUt, equivalent to 50 fine troy ounces of gold. This means tokens remain accessible to a limited number of large corporations or wealthy individuals. This represents a drawback of Gold Tether, made more significant by the fact XAUT has many competitors seeking to tokenize gold offering smaller minimum purchases. Having said this, Tether Gold tokens can be traded in smaller fractions on exchanges.

As noted, XUAT offers the option for redemption, however, this is restricted to an address in Switzerland and as such may deter some investors due to geographical constraints.

What can XUAT be used for?

XUAT can be used as a trusted store of value. It can also be traded against other cryptocurrencies on various exchanges.

Where can you buy Tether Gold?

XUAT is available to buy from the CEXs and DEXs as listed here. It is not available on all the main exchanges however popular options include Gate.io and Bitifinex. The price of XUAT will vary based on the exchange. Since the value of XUAT is pegged to physical gold, its price will also vary depending on the current market value of gold. For further XUAT price information please refer to the charts above.