What is Tether Gold?
Tether Gold is a digital asset structured as a stablecoin. While most assets in this class attempt to maintain a peg with the US Dollar, Tether Gold does so with Gold itself – an asset long viewed and leveraged as a stable hedge.
Tether Gold (XAUt) is issued and controlled by TG Commodities Limited – a sister company to Tether – which touts the offering as ‘Gold Made Easy’.
What is the Purpose of Tether Gold?
Much like any stablecoin, the purpose of Tether Gold is to provide holders with access to a digital asset meant to emulate the price movement of an underlying asset. It this particular instance, that asset is the precious metal Gold.
Not only does each XAUt closely track the price of 1 troy ounce of gold, this digital representation means that holders benefit from stability alongside the ability to transact on a global scale, while avoiding the pitfalls of traditional Gold custody.
How Does Tether Gold Work?
Tether Gold works in a similar fashion to most asset-backed stablecoins. When an investor or trader seeks to acquire XAUt, Tether purchases and/or assigns ownership of 1 troy ounce of physical gold per token. This Gold is then stored and custodied on behalf of the customer in secure vaults. The corresponding amount of tokens are then issued to the purchaser. Tokens can also be purchase on secondary markets, as detailed below.
Note that XAUt maintains a minimum purchase of at least 50 tokens/troy ounces.
Due to the nature of Gold ownership, redemption is not as simple as regular stablecoins pegged to the US Dollar. Holders can either redeem their XAUt for physical gold, or have it sold by TG Commodities Limited for a cash delivery instead – each process will result in fees
Token
As stated, each XAUt token represents indirect ownership of 1 troy ounce of gold. Reserves, which are stored in secure vaults and able to be audited. Accessible details surround reserves include serial numbers, purity, mass, and more.
XAUt tokens adhere to ERC-20 standards, meaning they are issued atop the Ethereum network.
Regulatory Status
While the idea of Tether Gold (XAUt) is certainly appealing, it is important to note that regulations surrounding stablecoins in general murky. Furthermore, Tether itself notes in its whitepaper for Tether Gold that, “For clarity, no regulatory authority has examined or approved of any of the
information set out in this whitepaper. No such action has been or will be taken under the laws
of any jurisdiction.”
As with any investment, make sure to do your own research and gauge risk tolerances before gaining exposure to a new asset.
How to Buy Tether Gold (XAUt)
Currently, Tether Gold (XAUt) is available for purchase on the following exchanges.
Binance – Best for Australia, Singapore, UK, & USA residents. Canadian residents are prohibited.
Discount Code: EE59L0QP for 10% cashback off all trading fees for non-USA residents. USA residents: Trade $100 & Earn $10 in 30 days after account registration.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for USA residents. (Excluding New York & Washington state)
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. This exchange currently accepts International & United States residents.
Bottom Line
Overall, Tether Gold and its token XAUt is an intriguing concept that looks to combine the benefits of both physical gold and digital assets. For those looking to gain exposure to gold in manner more efficient than what has traditionally been available, make sure to research this project.
