What is Tether Gold (XAUt)?

Tether's Expansion into Commodities

Tether Gold was born from Tether's ambition to expand beyond US dollar stablecoins into commodity-backed tokens.

Tether, the company behind USDT (the largest stablecoin by market cap), recognized that the same tokenization technology could be applied to physical gold, creating a digital asset backed by one of humanity's oldest stores of value.

TG Commodities Limited

TG Commodities Limited was established as a dedicated entity within the Tether group to handle gold-backed tokens. This separation provides operational clarity between Tether's dollar-denominated products (USDT) and its commodity-backed offerings (XAUt).

TG Commodities Limited manages the gold procurement, storage, allocation, and redemption processes.

Key Milestones

• • 2014: Tether launches USDT, the first major USD-pegged stablecoin.
• • Q1 2020: TG Commodities Limited launches Tether Gold (XAUt) on Ethereum and TRON.
• • Q2 2020: XAUt reaches $100M market cap as gold prices surge during COVID-19.
• • 2022: Gold prices rise amid inflation; XAUt demand increases as crypto-native gold hedge.
• • 2023: Paolo Ardoino becomes Tether CEO; continued focus on asset-backed token expansion.
• • 2024: Tether group reports over $7 billion in excess reserves; XAUt benefits from broader trust in Tether ecosystem.

Gold Tokenization Process

When new XAUt tokens are created (minted), TG Commodities Limited purchases an equivalent amount of physical gold that meets the London Good Delivery standard. Each token is assigned to a specific gold bar with a unique serial number, purity, and weight.

The token represents ownership of that allocated gold. When tokens are redeemed, the corresponding gold is released from allocation.

Dual Chain Architecture

XAUt is available on both Ethereum (ERC-20) and TRON (TRC-20). The ERC-20 version benefits from Ethereum's extensive DeFi ecosystem and broad exchange support. The TRC-20 version offers lower transaction fees, making it more cost-effective for frequent transfers. Both versions represent the same underlying gold.

Allocation Verification

Tether provides a verification tool on its website where XAUt holders can check their specific gold allocation. By entering their Ethereum or TRON address, holders can see the serial numbers, purity, and weight of the gold bars associated with their tokens.

This provides transparency about the physical backing of each token.

Price Tracking

The price of XAUt closely tracks the spot price of gold (XAU/USD) in global markets. Small premiums or discounts can occur based on exchange liquidity, trading demand, and minting/redemption activity.

Authorized participants can arbitrage any price deviation by creating or redeeming tokens against physical gold.

Swiss Vault Storage

All gold backing XAUt tokens is stored in secure vaults in Switzerland, one of the world's most trusted jurisdictions for precious metals custody.

The vaults meet the highest security standards for precious metals storage, including 24/7 surveillance, armed security, and comprehensive insurance coverage.

London Good Delivery Standard

Every gold bar backing XAUt meets the London Good Delivery (LGD) standard, set by the London Bullion Market Association (LBMA).

This standard requires bars to have a minimum fineness of 995.0 parts per thousand (99.5% pure gold), weigh between 350 and 430 troy ounces, and be produced by an LBMA-accredited refiner. LGD is the global benchmark for gold bar quality.

Verification Tool

Token holders can verify their gold allocation using Tether's online tool. By entering their wallet address, holders receive details about the specific gold bars assigned to their tokens, including serial numbers, refiner name, gross weight, and fine weight.

This level of transparency allows holders to confirm their physical gold ownership at any time.

Redemption Process

XAUt holders can redeem their tokens for physical gold delivery. The minimum redemption threshold is 430 troy ounces (approximately one London Good Delivery bar). Holders who wish to redeem must complete identity verification and coordinate delivery logistics. Redemption fees apply.

For smaller amounts, holders can sell XAUt on supported exchanges.

Allocation Transparency

Unlike pooled or unallocated gold products, XAUt provides allocated gold — meaning each token holder's gold is specifically identified and separated. Token holders do not share exposure with other holders.

If TG Commodities Limited were to face financial difficulties, the allocated gold would not be part of the company's general assets.

1Compare providers

Use coinvela to compare XAUt prices and fees across exchanges. Bitfinex (affiliated with Tether) typically offers the tightest spreads, but other platforms may be more convenient depending on your jurisdiction.

2Create an account

Sign up with your chosen exchange and complete identity verification (KYC).

3Fund your account

Deposit funds via bank transfer, cryptocurrency, or other supported payment methods. Some exchanges allow purchasing XAUt directly with fiat currency.

4Buy XAUt

Navigate to the XAUt trading pair (e.g., XAUt/USD or XAUt/USDT) and place your order. You can buy fractional amounts — you don't need to purchase a full ounce.

Wallet Types for XAUt

XAUt can be stored in any wallet that supports ERC-20 tokens (Ethereum) or TRC-20 tokens (TRON):

• • Software Wallets: MetaMask (Ethereum), Trust Wallet (both chains), or TronLink (TRON). Good for active trading and DeFi interactions.
• • Hardware Wallets: Ledger or Trezor for maximum security. Supports XAUt as an ERC-20 token. Best for long-term gold holding.

Hardware Wallets

For maximum security, use a Ledger or Trezor hardware wallet. These devices keep your private keys offline, protecting your gold-backed tokens from online threats. Given that XAUt represents real gold, securing your tokens is equivalent to securing physical gold ownership.

Protect Your Recovery Phrase

Your seed phrase is the only way to recover your XAUt if your device is lost. Write it down on paper and store it securely. Never share it online. Losing your seed phrase means permanently losing access to your gold-backed tokens.

Inflation Hedge

Gold has historically served as a hedge against inflation and currency devaluation. XAUt provides this same protection in a digital format, allowing holders to quickly shift between cryptocurrency and gold exposure as macroeconomic conditions change.

Portfolio Diversification

XAUt allows crypto investors to diversify into gold without leaving the blockchain ecosystem. Traditional portfolio theory suggests allocating 5-15% to gold as a hedge against equity and crypto market downturns. XAUt makes this allocation seamless for on-chain portfolios.

Global Gold Transfers

XAUt enables instant, borderless transfers of gold ownership. Sending gold-equivalent value internationally takes minutes rather than the days or weeks required for physical shipment. This is particularly useful for international trade, remittances, and cross-border wealth management.

Risks

XAUt carries risks including: counterparty risk (reliance on TG Commodities Limited and the Tether group), regulatory risk (gold-backed tokens face evolving regulations), custodial risk (dependence on Swiss vault security), and liquidity risk (lower trading volumes than major cryptocurrencies).

The Tether group has faced historical scrutiny over reserve transparency, which can affect confidence in XAUt. Always verify your gold allocation independently.

Paolo Ardoino

CEO of Tether and CTO of Bitfinex. Ardoino oversees the Tether group's stablecoin and commodity-backed token operations, including XAUt. Under his leadership, Tether has expanded beyond USDT into gold, energy, and data infrastructure.

A technologist by background, Ardoino has been instrumental in Tether's growth to over $100 billion in USDT circulation.

Jean-Louis van der Velde

Former CEO of Tether and Bitfinex. Van der Velde led the companies during their formative years, overseeing the launch of XAUt in 2020 and the expansion of Tether's product suite. He transitioned from the CEO role in 2023, passing leadership to Paolo Ardoino.

Stuart Hoegner

General Counsel of Tether and Bitfinex. Hoegner manages the legal and regulatory frameworks for all Tether products, including XAUt. His legal oversight covers compliance with international commodity regulations, gold custody standards, and cross-jurisdictional token issuance.

Regulatory Overview

XAUt occupies a unique regulatory position as a gold-backed token. While it functions similarly to stablecoins, its commodity backing subjects it to different regulatory frameworks than dollar-pegged tokens.

TG Commodities Limited operates under the regulatory frameworks applicable to commodity token issuers.

Regulation by Country

XAUt's regulatory status varies by jurisdiction:

United States: Gold-backed tokens face scrutiny from both the SEC and CFTC in the United States. XAUt is available to non-US persons on platforms like Bitfinex. US regulatory clarity for commodity-backed tokens remains evolving.

Canada: Canadian securities regulators have not specifically addressed gold-backed tokens. XAUt may be available on Canadian-accessible platforms, subject to provincial regulatory frameworks and exchange registrations.

European Union: Under MiCA (Markets in Crypto-Assets), asset-referenced tokens backed by commodities like gold face specific authorization requirements. TG Commodities Limited's compliance with MiCA requirements will determine XAUt's availability in EU markets.

Australia: XAUt may be available on Australian-accessible exchanges. ASIC has provided guidance on crypto assets, and gold-backed tokens could be classified as financial products depending on their specific characteristics.

XAUt's regulatory position benefits from the long history of gold as a recognized commodity but faces challenges as regulators develop frameworks for tokenized assets. Users should verify XAUt's availability and legal status in their jurisdiction before investing.