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.
Read more: Tether Eyes Fresh Investments to Push USAT Stablecoin to 100M Americans at December Launch