Tether is set to launch a new stablecoin backed by gold and pegged to the U.S. dollar, marking its first foray into tethered assets. The upcoming coin, named Alloy (aUSDT), will be created on the innovative Alloy by Tether platform.
Alloy will be backed by Tether Gold (XAUt), a token representing physical gold ownership, while maintaining its peg to the U.S. dollar. Essentially, Alloy is a synthetic dollar, designed to mirror the value and functionality of the U.S. dollar without direct backing.
Described in a recent announcement, tethered assets like Alloy are digital assets that aim to match the price of another asset using various stabilization mechanisms. The platform also hinted at the possibility of creating other tethered assets, including products that generate yield.
Users can mint the synthetic dollar by depositing XUSDT through smart contracts and price oracles, enabling seamless transactions using aUSDT while retaining their Tether asset backed by gold.
Developed by Tether subsidiaries Moon Gold and Moon Gold El Salvador, Alloy by Tether will be integrated into a real-world asset tokenization platform set to launch later this year, as mentioned by Tether CEO Paolo Ardoino.
While Tether’s aUSDT is not the first synthetic dollar, it has drawn comparisons to other stablecoins like USDe due to Tether’s strong liquidity and centralized control, which reduces principal-agent risk and allows for smarter decision-making.
To incentivize users, Tether is offering a 2:1 bonus to USDT holders who convert to aUSDT, with 10 million aUSDT reserved for this purpose. The move comes amidst growing competition in the stablecoin market, with various projects introducing their own synthetic dollar offerings.