Tether to shut down aUSDT stablecoin and focus on XAUT

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Tether to shut down aUSDT

Why these products were created

Tether’s aUSDT is an overcollateralized derivative product built on top of XAUT using Ethereum smart contracts. Its launch also reflected demand for gold-backed assets and tokenized real-world assets.

Alloy by Tether allowed users to deposit XAUT as collateral and mint aUSDT. At the same time, the value of locked XAUT exceeded the amount of aUSDT issued — similar to how some stablecoins or synthetic dollars are created against crypto collateral in DeFi.

Users could borrow funds or mint aUSDT against their XAUT holdings, gaining access to dollar-like liquidity without having to sell their exposure to gold.

Alloy by Tether was introduced in June 2024. Its current market capitalization stands at $1.2 million, while its backing includes 14.73 kilograms of gold worth about $2.2 million, according to Tether.

Focus on Tether Gold

The project will be wound down in phases. The first phase starts immediately: users will no longer be able to open new positions or mint new aUSDT. They will have three months to return their aUSDT and reclaim their XAUT before the September 17 cut-off date.

XAUT, meanwhile, remains a sought-after asset. According to the company, its market capitalization is $3 billion, and it is backed by 22,169 kilograms of physical gold.

Earlier this year, XAUT’s market capitalization rose sharply as gold prices hit record highs of just over $5,300 per ounce. However, the figure has since fallen by 19%.

In February, Tether also acquired a 12% stake in precious metals trading platform Gold.com for $150 million. The company plans to integrate XAUT into the platform.

Tether’s main asset

Tether remains the leading player in the stablecoin market thanks to USDT — the largest and most popular “digital dollar” in the crypto industry. For traders and exchanges, USDT has long been a core liquidity tool: it is used to price trading pairs, lock in profits, move capital between platforms, and gain quick access to dollar exposure without relying on the traditional banking system.

However, the future of USDT in Europe looks increasingly uncertain. Against the backdrop of MiCA regulation, major platforms have begun restricting or removing stablecoins that do not comply with the new requirements from the European market, including USDT. Binance, for example, announced the delisting of non-MiCA-compliant stablecoin pairs in the European Economic Area from March 31, including USDT. Therefore, if Tether does not change its regulatory approach or obtain the necessary recognition in the EU, USDT is likely to continue losing availability in Europe and could effectively leave the market.

As a reminder, XAUT broke into the Top 5 most popular pairs on Binance.

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