Each unit of Tether’s new cryptocurrency represents an ounce of gold associated with a specific bar, which will be located inside a vault in Switzerland.
Tether announced the launch of a new token whose value would be backed by physical gold reserves.
In a press release, Tether’s team reports that each unit of the digital currency will be worth an ounce of gold, and that the physical reserves that will support the cryptocurrency will be stored in a vault of a Swiss bank, of the which did not report more details.
The statement stipulates:
“Each unit of Tether Gold will represent ownership of an ounce of gold that will correspond to a specific bar … The new tokens that will operate under the XAU ticket will be issued on the Ethereum and TRON Blockchain under the ERC-20 and TRC-20 standards. “
Tether launches gold backed cryptocurrency
Upon the launch of this new stablecoin, a spokesman for the company said that this initiative comes in place due to the growing demand for a digital asset that has a much more attractive and reliable support for users, also considering the geopolitical needs that raises a new alternative financial system.
Explaining more details about this new asset, Tether CEO Paolo Ardoino commented:
“Tether Gold will provide users with the benefits of physical and digital assets, leaving aside the inconvenience of having gold through more traditional mechanisms, avoiding high storage costs and restricted access to the precious metal.”
This initiative seems very similar to the stablecoin announced by the Paxos team in September 2019, Pax Gold (PAXG), whose tokens can be exchanged for gold through associated and duly authorized entities, for example Bullion Exchange in New York.
Finally, Tether clarified that users of the new digital currency should not pay any commission for the storage of physical gold in the vault, so they can operate with the new token freely.