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General information only. This article does not consider your objectives, financial situation or needs and is not a recommendation to acquire, hold or dispose of any digital asset. Digital assets can go up and down and past performance is not necessarily indicative of future performance.
Tether Gold is a tokenised gold project issued by TG Commodities and associated with the Tether group, which is known for USD-pegged stablecoin products.
Turning their attention to other ventures, the team delivered what has evolved into one of the industry’s largest commodity-backed crypto assets by market cap, Tether Gold.
Tether Gold (XAUt) is a crypto token designed to track the price of gold. Tether states that each XAUt is intended to reflect the value of one fine troy ounce of gold and is backed 1:1 by physical reserves held in Swiss vaults.
The history of Tether Gold
Tether made a name for itself in the industry as leaders in the stablecoin market, operating Tether USD (USDT) for over a decade since its launch in 2014. Tether has also announced USAT, a newer pegged asset they claim is designed to abide by regulations outlined by the GENIUS Act within the United States.
As the popularity and capabilities of tokenisation began to expand, the team at Tether turned its attention to commodities. In January 2020, TG Commodities (a subsidiary of Tether) launched XAUt, a commodity-backed token intended to track the price of one troy ounce of gold.
As of June 2026, this product has captured a significant portion of the tokenised gold market, featuring a market cap exceeding $3.5 billion AUD. According to Tether’s March 2026 report, over 500k XAUt has been minted, with another ~120k or so available for direct redemption. Such is the uptake of tokenised gold that Tether is now one of the world’s largest owners of gold (reportedly storing 140 tonnes) – almost double the entire nation of Australia’s reserves (80 tonnes).
How does Tether Gold work?
Tether Gold has built its process around physically backed reserves, with each issued XAUt intended to correspond to one fine troy ounce of gold stored in a Swiss vault.
New XAUt can be minted directly from Tether Gold, while existing supply can be purchased on centralised exchanges, DEXs and other trading platforms. Thanks to the technology of smart contracts, XAUt can be divided into fractions as low as 0.000001, meaning users do not need to buy gold exposure in full troy ounces.
Additionally, some experienced users may deploy XAUt in DeFi smart contracts as collateral to participate in liquidity mining and other potential yield-generating processes. (Although it’s worth remembering these tools can be complex and can involve materially greater risks than simply holding the token).
Tether Gold was initially developed as an ERC-20 token that operates on the Ethereum blockchain. However, over time, the team has improved the project’s interoperability, with XAUt now supported on Tron’s network and the Binance Smart Chain.
Redemption is another core to the Tether Gold system. Although users may simply hold XAUt for gold price exposure, those who are eligible may decide they want to directly convert their tokens into the precious...well, golden metal – so long as they meet Tether’s requirements.
Tether Gold coordinates this through the Swiss gold market, either delivering gold bullion directly to eligible users (requiring redemption of approx. 430 XAUt), or selling the bullion to secondary traders for cash.
How is Tether Gold backed?
Tether states that it fully backs all circulating XAUt with ‘fine’ physical gold that abides by the Good Delivery standard maintained by the London Bullion Market Association.
These standards require each bar to have a minimum fineness of .995, weigh between 350 and 430 troy ounces, and sustain a standardised shape with minimal markings or flaws.
One of the blockchain’s purported advantages over centralised databases is transparency, allowing users to check allocation information online.
Tether leverages this through ‘allocation,’ mapping serialised physical bars to XAUt issued on the blockchain. By entering a wallet address into Tether’s lookup tool, users can view the serial number, weight, and purity information that Tether associates with their tokens.
This demonstrates the function of fractionalisation, with users able to view allocation information for a physical bar even if they hold far less than the amount required to seek redemption.
Tether’s gold holdings are subject to quarterly, third-party attestation reports from BDO Italia, which can be accessed via the platform’s website. These reports address whether the assets held in the vaults match the circulating supply of XAUt, as stated by Tether.
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Considerations for Tether Gold
Although the public nature of the blockchain can assist with transparency, it is still valuable for investors to perform due diligence before deciding whether to acquire a digital asset.
Reviewing the quarterly reports from Tether Gold and its attestation provider can be a starting point. Users should check if circulating XAUt remains fully backed according to this documentation.
Additionally, Tether Gold, like digital assets more generally, is an emerging technology that could be subject to changing regulatory requirements. It may be prudent to remain informed on both local and global legislation targeting the tokenised commodity industry, as changes may affect XAUt’s operation, availability or risk profile.
Summary
The tokenised gold asset class saw a surge in adoption throughout the mid-2020s, alongside increased gold price volatility and interest in 24/7 market access. Tether Gold has become a prominent product in this market, experiencing single-day trading volumes of over $1 billion AUD at points throughout 2026.
Tether states that each XAUt token is backed by one fine troy ounce of gold held in secure Swiss vaults, supporting fractional access and 24/7 trading where liquidity is available. The project also facilitates redemption, meaning eligible users may be able to redeem XAUt for gold bullion, subject to Tether Gold’s terms.
Ultimately, Tether Gold is a venture intending to bridge the physical world to the digital – one gold bar at a time.