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Home BUSINESS

Everything You Need to Know About Tether’s New Synthetic Dollar

Michael Juanico by Michael Juanico
June 17, 2024
in BUSINESS, CRYPTO
Reading Time: 2 mins read
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  • Tether, the issuer of the USDT stablecoin, has launched a new synthetic dollar called Alloy, which is backed by gold.
  • Alloy is being developed by Moon Gold NA SA de CV and Moon Gold El Salvador SA de CV, both members of the Tether Group.
  • Alloy is designed to track the price of gold through stabilization strategies and is over-collateralized by Tether Gold, with physical gold reserves housed in Switzerland.

Tether, the issuer of the popular USDT stablecoin, has unveiled a new synthetic dollar called Alloy that is backed by gold. This innovative asset aims to track the price of gold to bring more stability to the digital economy.

Tether Unveils Gold-Backed Synthetic Dollar

Tether announced the arrival of Alloy, a synthetic dollar backed by gold. This new asset is designed to redefine stability in the digital economy through the power of gold reserves. Tether is introducing a “tethered asset” that can track the price of gold through stabilization strategies.

Alloy’s Structure and Backing

The inaugural Alloy asset is called aUSD, which will function to track the value of a single dollar. Additionally, aUSD will be over-collateralized by Tether Gold and supported by physical gold reserves held in Switzerland. The aUSD synthetic dollars will be minted using Tether Gold as collateral.

Gold’s Appeal as Store of Value

Gold has seen growing appeal as a store of value given its inherent stability, security and reliability. Tether aims to tap into gold’s potential through its Alloy synthetic dollar. Backing the asset with physical gold reserves provides stability amid market volatility.

Conclusion

Tether’s new Alloy asset offers a creative way to bring gold’s stability to the digital economy. By tracking gold’s price movements, the synthetic dollar can offer more reliable value. It remains to be seen how Alloy will fare, but it marks an innovative approach to stablecoins.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.
Tags: goldSynthetic DollartetherTether GoldUSDT
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Michael Juanico

Michael Juanico

Michael is a BSBA Management graduate from Mindanao State University and has been a professional content writer since 2019. He began exploring cryptocurrency in 2021 and has since made blockchain and digital assets his primary focus. For nearly four years, Michael has contributed research and editorial content at Aiur Labs and BlockNews, producing clear and accessible coverage of market trends, trading strategies, and project developments. He is transparent about his personal holdings in Bitcoin, TRON, and select meme tokens, combining writing expertise with hands-on market experience to deliver trustworthy insights to readers.

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