Cryptocurrency company Tether, known for its stablecoin going by the same name — Tether (USDT) — has recently announced plans to launch a new digital currency that would be backed by gold. The new coin, known as Tether Gold (XAUt), supposedly keeps its physical gold stored somewhere in a Swiss vault.
With that said, Tether is known for the lack of transparency, which has sparked a number of controversies over the years. Many have theorized that, unless Tether changes its approach and becomes more transparent, investors may not be interested in supporting even a gold-backed coin.
Details about Tether Gold
The project has already published a whitepaper which claims that each XAUt token represents one ounce of London Good Delivery gold, which is, as mentioned, stored in a Swiss vault. However, the token will still be divisible, meaning that investors can choose the size of their positions. The lowest amount of Tether Gold that anyone can possess is 0.000001 XAUt.
Even so, Tether has set up a minimum purchase amount, which will obligate buyers to buy at least 50 tokens (approximately $75,000) at once. Further, the whitepaper also claims that token holders will be able to redeem their coins and obtain physical gold in return. This can be done at a location that the holder chooses in Switzerland, as the whitepaper states.
If they do not want physical gold, however, the token holders can always request that the asset is sold on their behalf. For now, the token is only available on TRON and Ethereum networks, although the company plans to introduce it to other networks as well, at some point in the future.
Tether Gold also stated that the goal is to bring increased transactional utility to gold, and it describes its token as a safe-haven asset that is highly mobile.
As mentioned, Tether was a center of numerous controversies in the past few years. It kept changing banking agreements, it was accused of not having enough money to back all of its coins, and even that it was a part of Bitcoin price manipulation. It was investigated by the Department of Justice, and more. Despite this, the coin is still around, and still among the largest cryptos by market cap (around $4,6 billion).
With that in mind, many are likely to trust its token, even though the company’s suspicious practices have been making headlines for years, now.