Tether's gold-backed cryptocurrency token XAUT is now supported by nearly eight tons of physical gold stored in Swiss vaults, according to the company's first quarterly attestation for 2025. Each token represents one troy ounce of gold, with the total supply reaching 246,523 ounces as market prices hit record highs amid growing global economic uncertainties.
What to Know:
- Tether's XAUT token reached a market capitalization of $770 million at the end of Q1 2025
- Token price surged to an all-time high of $3,423 on April 21, representing a 9.6% increase from Q1
- The growth coincides with significant central bank gold purchases totaling 1,044 metric tons in 2024
Gold Token Expansion Reflects Market Volatility
The market capitalization for XAUT reached $770.0 million by the close of March 2025, with individual tokens trading at $3,123, according to Tether's attestation published April 28. Just three weeks later, the token's price surged to $3,423, marking a 9.6% appreciation from quarter-end values.
Tether emphasized the importance of physical backing over dollar valuations in its report. "Investors should be more interested in the true gold backing (246,523 ounces) rather than dollar denominations, which simply go up and down with the market," the company stated.
The company shared the attestation results through its official social media channels, highlighting the significant physical gold reserves now supporting the token's circulation.
This expansion occurs during a prolonged surge in gold prices that has continued for nearly two years. The trend has been substantially driven by central bank acquisitions, with the World Gold Council reporting global gold reserves reached 37,755 metric tons by the end of 2024.
Central banks purchased 1,044 metric tons in 2024 alone, with BRICS nations representing the largest buyers as they actively diversify holdings away from U.S. dollar assets. This shift reflects growing concerns about dollar dependency among emerging economies seeking more balanced reserve portfolios.
Economic Factors Driving Gold Demand
Multiple economic factors have pushed investors toward gold in early 2025, according to Tether's assessment. These include increasing economic uncertainty, deteriorating political tensions globally, and strong demand for inflation-resistant investments.
The company specifically noted that XAUT market size expanded rapidly when investors expressed concerns about new global trade tariffs.
This pattern aligns with gold's traditional role as a safe-haven asset during periods of market turbulence.
In a notable development for the token's institutional adoption, Tether reported that El Salvador has officially added XAUT to its list of regulated financial products. This regulatory recognition represents a significant step toward mainstream acceptance of gold-backed digital assets.
Paolo Ardoino, CEO of Tether, emphasized the token's significance in the current economic climate. "Tether Gold continues to show the strength and durability of gold as a reserve of value, particularly in uncertain economic times," Ardoino remarked.
The company highlights its rigorous compliance standards as a key differentiator for XAUT. Each token is backed by LBMA certified gold bars that undergo regular auditing to ensure full collateralization, addressing transparency concerns that have affected confidence in other cryptocurrency assets.
Tokenization technology has transformed traditional assets like gold into digital tokens that can be exchanged across blockchain networks. This innovation enables fractional ownership of high-value assets and allows for relatively quick transfers compared to physical gold transactions. The model effectively combines gold's historical role as an economic safeguard with modern trading capabilities.
Final Thoughts
The growth of Tether's gold-backed token represents the convergence of traditional safe-haven investing with blockchain technology. As global economic uncertainties persist, the nearly eight-ton gold reserve backing XAUT demonstrates significant market demand for assets that combine gold's stability with digital flexibility.