Tether has expanded the use of its $23 billion gold reserves by bringing its Tether Gold (XAUT) tokenized product to cryptocurrency lender Ledn.
Ledn said he is adding support for XAUT, along with bitcoin and Tether’s USDT stablecoin, with loans expected to be taken against XAUT later this year.
Tether is attempting to monetize what has become one of the world’s largely private gold reserves. The stablecoin company says it holds around $23 billion in physical bullion backing XAUT, with each token representing one troy ounce of gold stored in vaults in Switzerland.
Gold-backed loans are traditionally the purview of central banks, major financial institutions and bullion dealers. Tether and Ledn argue that by tokenizing physical gold, the asset can function more like physical bitcoin as digital collateral, unlocking liquidity without having to sell it.
This follows the model Ledn has used for bitcoin-backed loans for several years. Customer collateral continues to remain 1:1, neither being lent nor used to generate returns, Ledn said, seeking to draw a line between the services it offers and those of its former rivals that went bankrupt in crypto winter 2022.
