Tether, the crypto company behind the world’s largest stablecoin USDT, had more than 11.6 tonnes of gold bars to back up 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, approximately 11.6 tons, of physical gold as of September 30. Each token is backed 1:1 by one fine troy ounce of gold, with reserves in Switzerland, according to a company statement.
XAUT’s market capitalization soared past 1.4 billion in the third quarter as gold hit new all-time highs amid concerns about inflation, geopolitical instability and rising demand from central banks. The token continued to rise through October to reach $2.1 billion, while gold peaked at $4,500.
The market capitalization growth was largely driven by growing demand from retail investors in emerging countries, Tether CEO Paolo Ardoino said in an interview with CoinDesk 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 the logistics of bullion storage. It also makes the yellow metal accessible to investors who do not have access to other traditional financial derivative products such as exchange-traded funds (ETFs) or opening a metals account.
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