The TON Blockchain Launches Tether’s New Stablecoin
Tether has issued XAUt0, the latest version of its gold-backed stablecoin, which the organization claims will allow frictionless transfers. Tether’s USDT has gone live on The Open Network (TON) through a strategic partnership with the TON Foundation.
XAUt0 is built on LayerZero‘s Omnichain Fungible Token (OFT) standard, allowing users to transfer the token between blockchains without the need for wrapped assets or third-party bridging protocols. The USDT0, a dollar-backed stablecoin, was earlier launched by Tether, which also operates over a number of different chains.
The original version, XAUt, is the market cap-leading gold stablecoin, worth over $832 million according to CoinGecko, and only exists on Ethereum. XAUt0 will transfer the gold-backed asset value of this cryptocurrency to TON and other future networks.
Every single XAUt token, featuring the brand new XAUt0, represents one troy ounce of physical gold. The supply of Tether’s USDT, including the Ethereum-based one, is backed by 7.7 tons of gold. This gold is stored in a vault located in Switzerland.
The TON blockchain, which was initially developed by Telegram, is now functioning independently. Tether’s decision to create a token on the TON blockchain is a way to take advantage of the growing popularity of TON, especially on Telegram. In addition, Tether’s move will bolster DeFi functionality by allowing the transaction of gold-backed tokens across decentralized applications (dApps).
The gold prices have risen considerably due to issues faced by central banks worldwide. By the end of May, gold was selling for about $3,304 an ounce, resulting in an annual growth of almost 30%. So far in 2023, the biggest gold exchange-traded funds (ETFs) are up more than 25%.
Via the introduction of XAUt, Tether is looking to compete against gold investment products like ETFs as well as competitor digital gold tokens like Paxos’s PAXG, with a market cap of $811 million being lower.
Tether hasn’t announced the extra chain that will support XAUt0 in the upcoming months. But the omnichain extension confirms there will be tokenization of precious metals. The initiative will allow crypto-native users and traditional investors to hold gold more flexibly and seamlessly.
