- The controversial company Tether Limited will launch a gold-covered stablecoin called Tether Gold.
- The Tether Gold token “XAUt” is launched as a TRC20 token on the TRON blockchain and as an ERC20 token on the Ethereum blockchain.
Tether is one of the most controversial projects in the cryptocurrency space and is suspected of having manipulated the Bitcoin price in 2017. The company announced a few hours ago that a new stablecoin, which is said to be fully covered by gold, will be launched. It will be called Tether Gold and will initially be issued on the exchange Bitfinex.
Tether Gold launches on ETH and TRON blockchain
The Tether Gold token XAUt will launch as ERC20 token on the Ethereum blockchain and as TRC20 token on the TRON blockchain. The company claims that every owner of a XAUt should automatically also come into possession of a troy ounce of physical gold. The gold ounce id owned by TG Commodities Limited, a company registered in the United Kingdom.
The company is run by the wealthy Parduman K Gupta family, who have told Forbes that they are among the largest private owners of land in the UK. Tether further states that the XAUt token can be transferred and issued to any address on a Tether wallet. One gold bar at a time is to be linked to a unique Tether Gold address. Tether describes the project as follows:
Tether Gold (XAUt) is a digital asset offered by TG Commodities Limited. One XAUt token represents one troy fine ounce of gold on a London Good Delivery gold bar. XAUt tokens will be capable of being fractionalized up to six decimal places (i.e. in increments as small as 0.000001 troy fine ounce). XAUt will be sold by TG Commodities Limited.
The gold is stored in a Swiss vault, the exact location of which is kept secret. Holders of XAUt-Token can make a redemption request to receive physical gold. However, to do so, customers must have completed the verification process of TG Commodities Limited and have the minimum required number of XAUt.
The physical gold can then be delivered to a location of their choice in Switzerland. In addition, TG Commodities Limited can be instructed to sell the gold and pay the cash proceeds to the holder. Tether Gold also provides a customer service that should be available 24 hours a day, 7 days a week.
To buy Tether Gold, an account must be opened with TG Commodities Limited and the registration process must be completed successfully. The minimum purchase value is 50 XAUt, which corresponds to a current value of approximately USD 77,970.
It will be possible to purchase smaller shares of an XAUt, but this is within the decision-making power of each participating exchange. So far Bitfinex and RenrenBit support the new Tether Gold token. It remains to be seen whether the new token will actually meet a real existing demand. With a market capitalization of more than 4.29 billion USD, Tether is the largest stable coin among cryptocurrencies.
Tether remains controversial in the crypto space
The cryptocurrency exchange Bitfinex and Tether are currently under further investigation by the Attorney General’s Office as they are suspected of having used $850 million of client funds to fill their own liquidity shortfall. It was discovered some time ago that each USDT is only 74% covered by US dollars instead of 100%. The community therefore views Tether Gold with mixed feelings.