Tether, the largest stablecoin issuer, has reported that its Tether Gold (XAUT) is backed by more than 7.7 tons of actual gold. In its recent report, the massive backing makes XAUT a leading contender in the tokenized gold market, especially in the face of increasing global economic uncertainty. Tether has increased the market capitalization of XAUT to $853.7 million, making it the largest tokenized gold product available today.
Tether’s Gold Reserves
By March 31, 2025, Tether had issued 246,524.33 XAUT tokens, each backed 1:1 by one troy ounce of gold stored in secure Swiss vaults. That is roughly equal to 246,524.33 ounces or more than 7.7 tons of gold. The LBMA-approved gold bars ensure security and transparency under El Salvador‘s regulatory framework.
Demand for Inflation-Resistant Assets
Rising concern over economic instability and inflationary fears has spurred stronger demand for Tether Gold. The CEO of Tether, Paolo Ardoino, noted that XAUT gives users the option of having a secure, transferable digital asset whose value is assured through physical gold reserves. Growing XAUT uptake reflects a broader phenomenon where investors shift into secure assets as geopolitics intensifies and traditional markets experience higher volatility.
Market Performance and Future Outlook
With a market cap of $853.7 million, XAUT indicates gigantic investor adoption. This demand is consistent with reports from the World Gold Council, which registered a 1% year-over-year growth in gold demand for Q4 2024. Central banks also bought more than 1,044 metric tons of gold in 2024. With the US Dollar Index having hit a three-year low, most investors are now looking to gold, and by extension, tokenized gold such as XAUT, as a hedge against market volatility.
Tether Gold has emerged as a lead player in the digital assets market by bringing together the security of gold and the power of blockchain. The ubiquitous economic tailwinds notwithstanding, XAUT as a safe-haven asset among investors is seemingly increasing in power. Strong regulation implementation provides comfort to the users, which positions XAUT well for increased adoption in the market.
