Tether, the crypto company behind the world’s largest stablecoin USDT, held more than 11.6 tons of gold bars to support the value of its tokenized gold supply as investor demand increased for the yellow metal.
issued by TG Commodities as part of El Salvador’s digital assets, was backed by more than 375,000 ounces, or approximately 11.6 tonnes, of physical gold as of September 30. Each token is backed 1:1 by a fine troy ounce of gold, with reserves held in Switzerland, according to a company statement.
XAUT’s market capitalization soared by more than 1.4 billion in the third quarter as gold hit new record highs amid inflation concerns, geopolitical instability and growing demand from central banks. The token continued to swell through October, reaching $2.1 billion as gold hit a high of $4,500.
Market cap growth was largely driven by growing demand from retail investors in emerging countries, Tether CEO Paolo Ardoino told CoinDesk last week.
Tokenized gold allows investors to hold a blockchain-based representation of the physical asset in a crypto wallet without the complexities of custody or logistics of storing bullion. It also makes the yellow metal accessible to investors who do not have access to other traditional financial derivative products like exchange-traded funds (ETFs) or opening a metals account.
Read More: Tether Considers New Investments to Bring USAT Stablecoin to 100 Million Americans at December Launch
