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Tether Gold ERC-20 (XAUT) — the first stablecoin linked to the gold rate

Over time, other stablecoins began to appear, including those tied to other assets such as the euro, gold, and even real estate. This article will explain Tether Gold, how the token is issued and reserves are stored, and what features this stablecoin has.

What is Tether Gold?

Tether Gold, or XAUT, is an ERC-20 standard token and stablecoin issued on the Ethereum blockchain and linked to the gold rate. Each XAUT stablecoin corresponds to one ounce of physical gold and is backed by the Good Delivery standard created by the London Bullion Market Association. Good Delivery is an international specification defining the production rules for standardized gold bars.

Tether issued stablecoin XAUT in 2020, creating the most famous and largest-capitalization USDT stablecoin. As of March 2024, the XAUT token only exists on the Ethereum network.

How is Tether Gold issued?

As with USDT, the XAUT stablecoin has a similar mechanism for issuing and burning tokens, which works like this:

  1. The owner of physical gold transfers his assets to Tether according to a minimum redemption amount and pays transaction fees. Tether's gold vault is located in Switzerland.
  2. After the owner transfers the assets, Tether issues an equivalent number of XAUT tokens on the Ethereum blockchain and transfers them to the owner's address.

A buyback occurs similarly: Tether burns the exchanged XAUT tokens, i.e. takes them out of circulation, and transfers the physical gold to the buyer.

Each XAUT holder's address has a corresponding amount of physical gold tied to it, which is redistributed in Tether Gold reserves when tokens are transferred to another wallet address. After receiving XAUT tokens, you can check the official Tether website to see how much gold is tied to a particular wallet address.

What are the benefits of Tether Gold?

XAUT cryptocurrency allows you to enjoy all the benefits of investing in gold, a limited asset that grows in value over time. At the same time, investors also gain additional benefits from owning cryptocurrency.

Let's list the main advantages of using Tether Gold:

  • Non-custodial storage. Investors do not need to transfer assets to banks (custodians) for storage and incur the associated costs, which can be pretty high. Instead, they store XAUT in a private crypto wallet, access controlled solely by a private key.
  • Fast and cheap transactions. At any moment in a short time, an investor can transfer a stablecoin to another wallet or exchange it on a decentralized exchange, paying only a small transaction fee.
  • Lack of trading restrictions. Gold is traded on the stock market, which operates on a specific schedule and has weekends. The cryptocurrency market provides 24/7 access to trading digital assets;
  • Divisibility. You cannot buy or sell physical gold in installments — before Tether Gold, this was only possible on the stock exchange in the form of units or virtual assets. However, XAUT can be divided into a million parts, each of which can be exchanged separately on a cryptocurrency exchange.
  • Accessibility. Banks may require documents proving the client's identity to purchase physical gold, and the process of buying gold is quite complicated. To create a cryptocurrency wallet, neither documents nor a bank account are required, but only a private key. After that, the user can deposit and withdraw cryptocurrency such as XAUT without restrictions. Tether Gold can be quickly purchased through a crypto exchange or exchanger and is easily found using the BestChange aggregator.

Risks of Tether Gold

However, XAUT, like all other stablecoins, has several significant drawbacks that create risks for investors. The first and foremost is the risk of losing parity with gold, i.e., decoupling from its exchange rate. In this case, it will be impossible to sell XAUT at the current gold rate, and you can only exchange the token for physical bullion at Tether itself, provided that the reserves are sufficient.

Tether provides detailed reports on XAUT's stablecoin reserves on its website. According to this data, as of March 2024, circulating Tether Gold tokens are 100% backed by physical gold.

XAUT market data

Tether Gold is the leading gold exchange rate-linked stablecoin by capitalization. According to CoinMarketCap data, as of March 2024, the XAUT stablecoin ranks 141st among all cryptocurrencies in capitalization, which exceeds $523 million. The number of XAUT tokens available on the market was about 246 thousand. Despite the large capitalization and the fact that the XAUT token is issued by a well-known company in the crypto industry, Tether, the issuer of the leading USDT stablecoin, Tether Gold is absent on many major cryptocurrency exchanges, except Bitfinex and OKX.

Where to buy XAUT?

Tether Gold can be purchased using the BestChange aggregator using one of the available methods:

  • Perfect Money (USD, EUR and BTC);
  • Advanced Cash (USD, EUR, and KZT);
  • Payeer (USD and EUR);
  • Capitalist (USD);

Conclusion

Tether Gold is a suitable alternative for users interested in investing in gold. Still, they face the complexities and costs of traditional banking systems and want complete control over their assets.

For centuries, gold has been a proven asset that helps accumulate and multiply capital, and now, these same benefits are available to crypto investors without intermediaries.

Exchange Tether to e-currencies

On our site you can see the current exchange rates of Tether Gold ERC20 (XAUT) to other electronic payment systems.

Exchange Tether Gold ERC20 (XAUT) to another currency:

Exchange e-currency to Tether Gold ERC20 (XAUT):

© BestChange.com – , updated 03/07/2024
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