The performance of fiat currencies is determined by central banks; the banks monitor the markets and guarantee that there is enough money in countries to avoid inflation or other financial shocks. Tether Gold is backed by actual gold in Switzerland, as opposed to regular coins, and may be stored as a digital asset via a digital wallet. Actual gold boosts the token's credibility; it is unlike any other asset backed by the greenback. It provides a safety net when fiat money depreciates, bringing down the digital assets it backs with it. Tether has verified that it possesses the keys to its Swiss gold vaults; additional levels of protection exist to secure the gold, making it one of the safest assets on the globe.

Tokens backed by USD are still the most popular nowadays. People have not solved the secrets of gold; perhaps it should stay just that, something used to produce jewellery. As Tether continues to wreak havoc in the crypto sector by implementing gold tokenization, some reports claim that XAUT, the stable currency, is 74% USD-backed.

History

Since the Tether Gold is a product of Tether, it is important to know something about the creators. USDT, called Realcoin at the time, was founded in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars. Brock Pierce is a well-known entrepreneur who co-founded many high-profile enterprises in the cryptocurrency and entertainment sectors. He co-founded Blockchain Finance, a venture capital business, in 2013.

For the first two years of Tether's existence, Reeve Collins served as CEO. Previously, he co-founded numerous successful businesses, including the online ad network Traffic Marketplace, the entertainment company RedLever, and the gaming website Pala Interactive. Collins will lead SmarMedia Technologies, a marketing and advertising technology business, in 2020.

In January 2020, Tether launched the Tether Gold platform. Tether is led by CEO JL Van de Velde. On January 20, 2022, the whitepaper was released.

How does it work

According to the whitepaper, Tether's release of a gold-backed product is a step forward in the evolution of money. Because gold is more complicated than traditional currency, the advantage of a gold-backed stablecoin outweighs the benefit of traditional cash. Tether Gold intends to give consumers with access to a scarcity-based asset with price stability similar to gold, but with the transactional usefulness of a digital token. The XAUT token is an ERC20 token, which is a standard that outlines a set of regulations that all tokens in the Ethereum ecosystem must follow. Each XAUT token symbolizes one troy fine ounce of London Good Delivery gold stored in a Swiss vault. The token can be fractionalized to up to six decimal places.

Tether Gold also reallocates the actual gold connected with the XAUT stored at each address when an on-chain transaction moves the token to another on-chain address. This operation is carried out on behalf of token holders in order to reduce the quantity of actual gold bars linked with each address that has XAUT. This reallocation occurs in real time, so that each token may always reflect ownership of actual gold on a specific gold bar.

Total supply and circulation

Total supply is the same as the number of coins in circulation, which is 246,524 XAUT.