Tether’s XAUT Tokens Now Backed by Physical Gold - Digital Meets Tangible

Tether just fused the digital and physical asset worlds—announcing its XAUT tokens are now directly backed by physical gold reserves.

From Stablecoin Giant to Gold Custodian

The move transforms the company from a pure-play stablecoin issuer into a hybrid digital-physical asset manager. It's a strategic pivot that leverages Tether's massive scale and trust within crypto to bridge into traditional safe-haven assets.

Why Gold? Why Now?

In an era of monetary uncertainty and digital volatility, physical gold represents the ultimate historical hedge. Backing a digital token with it creates a hybrid instrument: the liquidity and programmability of crypto, married to the timeless, tangible security of bullion. It's a direct appeal to investors seeking stability without exiting the digital ecosystem.

The Mechanics of Trust

For this to work, transparency is non-negotiable. The system relies on verifiable, regular audits proving the physical gold exists in secure vaults and matches the XAUT in circulation. It's a classic finance problem—proving the asset backs the promise—solved with blockchain's public ledger and third-party verification.

A New Era for Asset-Backed Tokens

This isn't just about gold. It's a blueprint. If successful, the model could extend to other real-world assets—real estate, commodities, fine art. Tether is effectively building a pipeline to tokenize and democratize access to the world's most exclusive tangible wealth. Of course, it also cleverly creates a new revenue stream from management and custody fees—because in finance, even a hedge against the system finds a way to monetize.

One cynical observer might note: in a world fleeing fiat uncertainty, it's poetic that a digital dollar proxy now seeks legitimacy in the very asset that once backed those dollars. The future of money looks suspiciously like its past—just with a digital wrapper.

Tether backs XAUT tokens with physical Gold

Tether already offers a gold-backed digital token called XAUT. Each XAUt token is backed by real gold bars stored in secure vaults. According to Tether’s website, the company holds 1,329 gold bars, equal to 16.2 metric tons of Gold, to support XAUT.

As of Tuesday, XAUT had a market value of $2.3 billion, according to CoinGecko. This value has almost quadrupled in the past year, showing that more people are using or investing in it.

Tether states that anyone who owns XAUT tokens can redeem them for physical Gold. The company can even deliver gold bars to any physical address in Switzerland, according to its website.

Last year, Tether released its first attestation report for XAUT. BDO Italia, an accounting firm, prepared the report. However, the report did not fully comply with international financial reporting standards, as it did not include some important financial details. Critics have been asking Tether to allow full independent audits for many years.

Despite this criticism, Tether CEO Paolo Ardoino stated in April that XAUT was gaining strong interest in emerging markets, where individuals are seeking safer ways to protect their assets.

Gold-backed tokens gain ground as competition grows

The name Scudo has historical roots. It was used in Italy more than 400 years ago to describe different kinds of gold and silver coins. The word comes from a Latin term meaning “shield.” This is interesting because Tether’s logo also looks like a shield.

Tether’s CEO, Paolo Ardoino, and CFO, Giancarlo Devasini, were both born in Italy. Last year, Tether bought a minority stake in Juventus, one of Italy’s most famous football clubs. A recent attempt by Tether to buy a majority stake in the club was rejected.

Tether also offers another product called Alloy, which it describes as a “Tethered Asset.” By using XAUT tokens as collateral, customers can receive aUSDT, a digital token that functions similarly to USDT and is pegged to the U.S. dollar.

Tether is not the only company offering gold-backed digital tokens. Before XAUT was launched, another company called Paxos introduced PAXG, the first digital gold token that could be redeemed for real Gold. On Tuesday, PAXG had a market value of $1.7 billion, after tripling in size over the past year.

Paxos is also the issuer of PayPal’s PYUSD stablecoin. In a recent announcement, Paxos officials declared that PAXG WOULD now be exclusively a gold token controlled by federal bank regulators.

Nevertheless, even as XAUT is evaluated at $2.3 billion, overall, Tether claims to have much more Gold. By the close of Q3 2025, the company reported that it held 116 metric tonnes of Gold, worth almost USD 17 billion according to today’s prices.

With Scudo, Tether aims to create a new and user-friendly gold standard for the digital age—in other words, to recreate what Gold once was.

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