What happened?
The stablecoin protocol USDT0 launched 'XAUT', allowing 'digital gold' to move freely across blockchains. The newly launched XAUT0 token is built on Tether's physically gold-backed XAUT, enabling XAUT0 to transfer seamlessly between different blockchains like having a 'magic door', without the traditional complex bridging process. This will greatly expand the potential of digital gold in trading and DeFi applications, such as serving as collateral.
Tether replicates the successful model of USDT0, bringing gold into mainstream crypto applications. The launch of XAUT0 is another strategic move following USDT0. Tether applies the same technology to gold this time, demonstrating their determination to integrate 'physical assets' more deeply into crypto-native applications, allowing ancient value storage methods to be compatible with DeFi.
The initial deployment of XAUT0 was chosen on The Open Network (TON). Since TON is the blockchain for the popular messaging application Telegram, this also means millions of Telegram users will be able to buy and use this gold-backed token directly in the in-app wallet.
Tether brings gold onto the blockchain, gold can also play in DeFi
The stablecoin protocol USDT0 is actively pushing tokenized gold into crypto-native applications, aiming to make the world's oldest method of value storage compatible with decentralized finance (DeFi) applications.
The stablecoin protocol USDT0 is a new type of stablecoin protocol officially launched by Tether (the company issuing USDT) in January 2025, known as the cross-chain bridging version of USDT, primarily aimed at addressing issues such as high costs, liquidity fragmentation, and operational complexity faced by USDT when used across multiple blockchains.
The digital gold launched by Tether (Tether Gold, abbreviated as XAUT) means that each token corresponds to one troy ounce of physical gold stored in Swiss vaults and is linked to specific gold bars that meet the standards of the London Bullion Market Association, while also supporting the redemption of physical gold.
Imagine you have digital gold XAUT, but it can currently only be used on specific blockchains, just like being able to withdraw money only from a specific ATM.
Now, a new platform has launched the digital gold token 'XAUT0'. XAUT0 is like an 'upgraded' or 'super mobile version' of XAUT, and its biggest feature is the use of a technology called LayerZero, which is 'full-chain' (omnichain) technology.
'What does 'full-chain' mean?'
In simple terms, it’s like creating a 'magic door' for your digital gold (XAUT0). Previously, transferring gold from one blockchain to another required a complicated 'bridging' or 'wrapping' process, similar to transporting goods from one city to another, which required changing vehicles or ships in between.
But with 'full-chain' technology, 'XAUT0' can travel freely between different blockchains without needing these troublesome 'bridges' or 'packaging'.
First Launch and Future Prospects
Tether announced a partnership with the TON Foundation to launch the full-chain version of its gold stablecoin XAUt0 on The Open Network (TON) for the first time, aiming to expand the token's availability across various ecosystems. Telegram users will be able to buy and use this gold-backed token directly in the wallet within Telegram, with the expectation of bringing tokenized assets to millions of users.
TON was originally developed by Telegram and continued to develop as an independent operational project after settling a lawsuit with the U.S. Securities and Exchange Commission (SEC) in 2020.
The plan to promote XAUT0 to more blockchains will take place in the third quarter of this year. Lorenzo R. stated, 'We will launch on multiple chains, some of which will be more geared towards DeFi applications.'
The non-full-chain version of XAUt is currently the largest gold stablecoin by market capitalization, with a market cap exceeding $832 million according to foreign media (CoinGecko), followed closely by Paxos' Pax Gold (PAXG), which has a market cap of $811 million (as of June 2).
It is worth noting that XAUt is currently only available on the Ethereum blockchain. According to Tether's report for the first quarter of 2025, Tether holds over 7.7 tons of physical gold as reserves for the XAUT stablecoin.
The launch of XAUt0 may be modeled after Tether's previous launch of USDT0.
USDT0 is designed by Tether to facilitate the circulation of their dollar stablecoin USDT across different blockchains. It acts like a 'universal highway' that allows USDT to move smoothly across approximately ten different blockchains, such as Arbitrum, Optimism, and Kraken's Ink. Since its launch earlier this year, the circulation of USDT0 has been quite substantial, accumulating a scale of $1.3 billion.
Lorenzo R., co-founder of USDT0, stated in an interview with foreign media (CoinDesk), 'I am a Bitcoin holder myself, but I also like gold and hope to have an easier and more direct way to acquire and use it in everyday life.' He added, 'We are still in a very early stage of integrating physical assets and commodities into DeFi protocols.'
References: cointelegraph, coindesk
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