Tether Holdings Ltd., the issuer of the largest stablecoin in the cryptocurrency market, has created a new synthetic dollar aUSDT, which is backed by gold, Bloomberg reports.
The token was created on the new Alloy by Tether platform and will be traded as USDT through smart contracts on the Ethereum Mainnet blockchain, where users can mint it by depositing another Tether token that tracks the value of gold.
The new offering underscores Tether's ambition to expand beyond its USDT stablecoin, a $112.5 billion token that tracks the value of the U.S. dollar and is backed by U.S. Treasury bill reserves and other securities and investments.
According to the company, Tether Gold has a market capitalization of about $573 million and is backed by physical gold stored in Switzerland.
The new aUSDT currency is designed for users who want to make transactions, payments, and remittances in a currency similar to the US dollar without having to sell their gold-backed digital assets.
Stablecoins such as USDT have come under scrutiny in recent years as regulators have been concerned about the liquidity of the reserves that back them and whether they can withstand massive redemption requests in the face of market pressure.