Tether, the crypto company behind the world’s largest stablecoin USDT, held over 11.6 tons of gold bullion to support the value of its tokenized gold supply as investor demand for the yellow metal grew
issued by TG Commodities under El Salvador’s digital asset framework, was backed by more than 375,000 ounces, about 11.6 tons, of physical gold per September 30. Each token is backed 1:1 by a fine troy ounce of gold, with reserves held in Switzerland, according to a company statement.
XAUT’s market capitalization increased by over 1.4 billion in the third quarter as gold rose to new record highs on inflation concerns, geopolitical instability and increasing demand from central banks. The token continued to swell through October, hitting $2.1 billion as gold hit a high of $4,500.
Market growth was largely driven by rising demand from retail investors in emerging countries, Tether CEO Paolo Ardoino told CoinDesk in an interview last week.
Tokenized gold allows investors to hold a blockchain-based representation of the physical asset in a crypto-wallet without the complexities of custody or logistics that store gold bullion. It also makes the yellow metal available to investors who do not have access to other traditional derivative financial products such as exchange-traded funds (ETFs) or opening a metal account.
Read more: Tether Eyes Fresh Investments to Push USAT Stablecoin to 100 Million Americans at December Launch
