Tether has expanded the use of its $23 billion gold reserves by bringing its tokenized product Tether Gold (XAUT) to crypto lender Ledn.
Ledn said it is adding support for XAUT alongside bitcoin and Tethers stablecoin USDT, with loans against XAUT expected later this year.
Tether is trying to monetize what has become one of the world’s largely privately owned gold reserves. The stablecoin company says it holds about $23 billion in physical bullion backing XAUT, with each token representing a troy ounce of gold stored in vaults in Switzerland.
Gold-backed lending is traditionally the domain of central banks, large financial institutions and bullion dealers. Tether and Ledn argue that by tokenizing physical gold, the asset can function more like physical bitcoin as digital security, unlocking liquidity without having to sell it.
This follows the model Ledn has used for bitcoin-backed loans for several years. Customer security continues to be held 1:1, without being lent or used to generate returns, said Ledn, which seeks to draw a line between the services it offers and those of its former rivals, which went bust in the 2022 crypto winter.
