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Cryptocurrency News Articles
Tether Unveils Alloy, a New Category of Digital Assets Tethered to Gold and Fiat Currencies
Jun 18, 2024 at 01:10 am
Tether, a prominent player in the cryptocurrency sector, has unveiled Alloy, a groundbreaking digital asset tied to Tether Gold (XAU
Cryptocurrency firm Tether has announced the launch of Alloy, a new digital asset pegged to Tether Gold (XAU₮).
Alloy, created by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., subsidiaries of the Tether Group, is designed to combine the stability of fiat currency with the security of gold.
According to Tether, Alloy introduces a new class of digital assets called “tethered assets.” These assets are created to follow the value of reference assets through stabilization mechanisms such as over-collateralization with liquid assets and secondary market liquidity pools. This approach ensures a close alignment in value and stability between the reference asset and its tethered digital counterpart.
The first token launched under Alloy by Tether is aUSD₮, which is designed to track the value of one US dollar. What sets aUSD₮ apart is that it is over-collateralized by Tether Gold (XAU₮), which is itself backed by physical gold reserves in Switzerland.
This setup allows users to make digital transactions, payments, and remittances using a currency that maintains the familiar stability of the US dollar, without having to sell their XAU₮ holdings.
Alloy by Tether is deployed on the Ethereum Mainnet through smart contracts. Users can create aUSD₮ by depositing Tether Gold (XAU₮) as collateral via Ethereum-compatible smart contracts. These contracts maintain transparency by monitoring all collateral and minted tokens, and they utilize Price Oracles to continuously assess the mint-to-value (MTV) ratio.
Moving forward, Alloy by Tether plans to expand its offerings to include products that may generate yield. This initiative is designed to enhance asset management for institutional investors by offering a gold-backed digital asset that can be easily integrated into diverse portfolios.
Paolo Ardoino, CEO of Tether, commented on the launch of Alloy, highlighting its significance in introducing a new class of digital assets pegged to gold and fiat currencies. He anticipates observing how this innovative solution interacts with the broader market landscape and aims to integrate this technology into Tether’s upcoming digital asset tokenization platform.
"Today marks the launch of Alloy by Tether, a new category of digital assets pegged to gold and fiat currencies," announced Tether.
"The first token launched under Alloy is aUSD₮, designed to track the value of 1 US dollar and over-collateralized by XAU₮, which is backed by physical gold reserves in Switzerland."
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