Tether Phases Out Gold-Backed Derivative Stablecoin aUSDT

Tether is prioritizing its flagship products by targeting rising user interest, improving market liquidity, and capitalizing on wider long-term growth prospects across the digital asset sector.

Stablecoin issuer Tether is discontinuing Alloy by Tether along with its gold-backed and overcollateralized aUSDT stablecoin, nearly two years after launch, as the company shifts its attention toward products and market segments showing stronger user demand and growth potential.

Tether revealed the “strategic changes” on Wednesday after assessing user engagement trends, market interest, and the company’s wider business objectives and long-term priorities.

Tether stated that resources will be directed toward segments demonstrating stronger customer interest, greater liquidity, and wider long-term growth potential, with particular emphasis on its gold-backed digital asset XAUT and several key products across the company’s ecosystem.

Although stablecoins continue to serve as Tether’s primary business, increasing attention has been directed toward technologies beyond the stablecoin sector. The company has expanded its investments into Bitcoin mining operations, artificial intelligence, cloud infrastructure, and robotics. On June 11, Tether further strengthened that strategy by leading a $1 billion funding round for German technology firm NEURA.

Tether’s aUSDT operates as an overcollateralized derivative asset developed on top of XAUT and powered by Ethereum smart contracts. The product highlights growing market interest in gold-backed digital assets as well as tokenized real-world asset solutions.

Alloy by Tether enabled users to lock XAUT as collateral in order to generate aUSDT, with the amount of XAUT held in reserve remaining higher than the value of aUSDT minted. The mechanism closely resembled the way certain stablecoins and synthetic dollar assets are issued in decentralized finance using crypto-backed collateral.

Users were able to mint or borrow against their XAUT positions, allowing dollar-denominated liquidity to be obtained while maintaining exposure to gold-backed assets rather than selling them outright.

According to Tether, Alloy by Tether, which was introduced in June 2024, currently holds a market capitalization of approximately $1.2 million and is supported by 14.73 kilograms of gold valued at roughly $2.2 million.

Tether Gold Maintains Strong Popularity Among Investors

The shutdown process will be carried out in multiple stages, beginning immediately with the suspension of new position openings and the issuance of additional aUSDT. Holders have been given a three-month period to redeem their aUSDT and recover their XAUT before the final deadline of Sept. 17.

According to the company, XAUT continues to attract significant interest, maintaining a market capitalization of approximately $3 billion while being supported by 22,169 kilograms of physical gold reserves.

Its market value climbed sharply earlier this year as gold prices reached a record level of slightly above $5,300 per ounce. Since that peak, however, the asset has experienced a decline of approximately 19%.

In February, Tether acquired a 12% ownership stake in the precious metals marketplace Gold.com through a $150 million investment, while outlining plans to incorporate its XAUT gold-backed token into the platform’s services and broader ecosystem.

Chinese Yuan and Euro Stablecoins Discontinued Amid Market Shift

Alloy by Tether is not the only offering that Tether has discontinued this year, as several products have been removed from its lineup as part of the company’s broader strategic adjustments.

In February, Tether revealed plans to phase out its Chinese yuan-pegged stablecoin, CNHT, attributing the decision to shifting market dynamics, weak adoption of the asset, and a lack of consistent community demand when compared with other supported tokens.

In November, Tether discontinued its euro-pegged stablecoin, EURT, pointing to regulatory challenges in Europe while shifting its focus toward other projects, including Hadron, the asset tokenization platform introduced by the company in 2024.

However, in May, plans for the launch of a Georgian lari-pegged stablecoin, GELT, were announced by Tether, with the initiative being developed in collaboration with the Georgian government.