Key Takeaways:
Tether is extending its tokenized gold strategy by allowing holders of XAUT to borrow against their bullion, mirroring bitcoin-backed lending without requiring users to sell their underlying gold.
Tether, the issuer of the world's largest stablecoin USDT, is bringing its tokenized gold product Tether Gold (XAUT) to crypto lender Ledn, with borrowing against XAUT expected later this year, the companies said. The move puts Tether's roughly $23 billion physical gold reserve — one of the largest privately held gold stockpiles globally — to work as collateral for loans.
"Demand is growing for solutions that combine long-term ownership with financial flexibility," Paolo Ardoino, chief executive officer of Tether, said in a statement.
Tether holds about $23 billion worth of physical bullion backing XAUT, with each token representing one troy ounce of gold stored in vaults in Switzerland, according to the company. The stablecoin issuer has accumulated roughly 140 metric tons of physical gold, making it one of the world's largest corporate holders of the precious metal. Ledn, which has offered bitcoin-backed loans for several years, said client collateral will continue to be held 1:1 without being lent out or used to generate yield, drawing a distinction from crypto lenders that collapsed during the 2022 market downturn.
Gold-backed lending has traditionally been the domain of central banks, major financial institutions and bullion dealers. By tokenizing physical gold on the blockchain, Tether and Ledn argue the asset can function more like bitcoin as digital collateral, unlocking liquidity for holders without requiring them to sell. The offering mirrors the model Ledn has used for bitcoin-backed loans, where borrowers retain upside exposure to the underlying asset while accessing cash.
Tether's broader expansion beyond stablecoins
The gold-backed loan product is the latest example of Tether using profits from USDT — the dominant stablecoin by market capitalization — to expand into a broader technology and infrastructure group spanning finance, energy and artificial intelligence. Tether has invested in bitcoin mining, renewable energy projects and AI infrastructure provider Northern Data, while also taking a $150 million stake in precious metals marketplace Gold.com in February and partnering with crypto financing firm Antalpha to expand XAUT's use in lending and physical redemption.
The company's gold strategy extends beyond lending. On June 26, Solonix.one launched a regulated XAUT wallet in El Salvador, enabling eligible clients to deposit, hold and withdraw Tether Gold within a regulated digital asset environment. The wallet is operated by Digital Trading Group of Central America, which is licensed by the Central Bank of El Salvador as a bitcoin services provider.
What's at stake for the stablecoin market
Tether's push into gold-backed lending could increase demand for XAUT by creating a yield-bearing use case for tokenized gold, potentially attracting traditional gold investors into the crypto ecosystem. The move also deepens Tether's competitive moat in the stablecoin and real-world asset sector, where rivals such as Circle's USDC and Binance's BUSD have focused primarily on fiat-backed products. If gold-backed lending gains traction, it may pressure competitors to offer similar tokenized commodity products or risk losing market share in the growing RWA segment.
This article is for informational purposes only and does not constitute investment advice.
