Tether Calls It on aUSDT: Gold-Backed Stablecoin Gets the Heave-Ho After Two Years 🥇

Tether is winding down Alloy by Tether and its gold-backed, overcollateralized stablecoin aUSDT two years after launch, the company said Wednesday, citing a review of user activity, market demand and "broader priorities." Tether said it will focus resources on areas where it is seeing "stronger user demand, deeper liquidity and broader long-term market opportunity," including its gold-backed digital asset XAUT and other core products across its ecosystem. aUSDT is a dollar-pegged derivative stablecoin built on top of XAUT via Ethereum smart contracts, allowing users to deposit XAUT as collateral to mint aUSDT with the locked XAUT value exceeding the value issued, similar to crypto-collateralized synthetic dollars in DeFi.

The wind-down is being carried out in phases, starting immediately with a halt on opening new positions or minting new aUSDT. Users have three months to return their aUSDT and reclaim their XAUT, with a cut-off date of Sept. 17, 2026, after which XAUT can no longer be recovered through the Alloy platform. Alloy by Tether, announced in June 2024, has a current market capitalization of $1.2 million and is backed by 14.73 kilograms of gold worth around $2.2 million, according to Tether. New aUSDT minting was disabled starting June 17.

XAUT itself remains in demand, with a market capitalization of $3 billion and backing of 22,169 kilograms of physical gold, per the company. Its market cap climbed earlier this year when gold prices hit an all-time high of just over $5,300 per ounce, though it has since retreated 19%. Tether also acquired a 12% stake in precious metals platform Gold.com for $150 million in February, with plans to integrate XAUT into the platform.

Alloy is not the only product Tether has shelved this year. In February, Tether announced it was discontinuing its Chinese yuan stablecoin CNHT, citing "evolving market conditions, low interest in the product, and limited sustained community demand" relative to other supported assets. In November, the company wound down its euro stablecoin EURT, citing European regulatory issues and a focus on other initiatives such as Hadron, its asset tokenization platform launched in 2024.

While stablecoins remain Tether's core business, the issuer has expanded its interests into Bitcoin mining infrastructure, artificial intelligence, cloud computing and robotics. Most recently, Tether led German tech company NEURA's $1 billion funding round on June 11, signaling that capital is being redirected toward ventures outside the stablecoin perimeter as the company trims its token lineup.