Tether Tokenized Gold Reserves Exceeded 11.6 Tons in Q3 Amid Yellow Metal’s Rally

Tether’s gold-backed token swelled above $2 billion market cap, driven by record prices and surging retail demand, CEO Paolo Ardoino said in an interview.

• Tether’s tokenized gold XAUT was backed by 375,000 ounces of physical bars held in Switzerland as of the end of September, the company said.
• The market cap of Tether Gold soared to $2.1 billion as of October, driven by rising gold prices and demand from retail investors in emerging markets.
• Tokenized gold allows investors to hold a blockchain-based representation of gold without the complexities of physical storage.

Tether, the crypto company behind the world’s largest stablecoin USDT, held over 11.6 tons of gold bars to back the value of its tokenized gold offering as investor demand grew for the yellow metal

Issued by TG Commodities under El Salvador’s digital asset framework, was backed by more than 375,000 ounces, roughly 11.6 tons, of physical gold as of September 30. Each token is backed 1:1 by a fine troy ounce of gold, with reserves held in Switzerland, according to a company statement.

XAUT’s market cap soared over 1.4 billion in the third quarter as gold rallied to new record highs amid inflation concerns, geopolitical instability and rising demand from central banks. The token continued to swell through October hitting $2.1 billion as gold hit a $4,500 high.

The market cap growth was largely driven by surging demand from retail investor in emerging countries, Tether CEO Paolo Ardoino told CoinDesk interview 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 logistics storing bullion. It also makes yellow metal accessible to investors who don’t have access to other traditional derivative financial products like exchange-treaded funds (ETF) or opening a metals account.