Tether’s Gold-Backed XAUT Surges as Investor Demand for Tokenized Gold Soars

Tether, the company behind the world’s largest stablecoin USDT, is strengthening its presence in the precious metals market as demand for gold-backed digital assets climbs. As of September 30, Tether held more than 11.6 tons of physical gold—over 375,000 ounces—to back its tokenized gold offering, XAUT, issued under El Salvador’s digital asset framework through TG Commodities. Each XAUT token represents one fine troy ounce of gold securely stored in Switzerland.

The token’s value has surged alongside the global rally in gold prices, driven by inflation concerns, geopolitical tensions, and increasing purchases from central banks. XAUT’s market capitalization climbed past $1.4 billion in the third quarter and continued rising to $2.1 billion in October, as gold prices reached new record highs of around $4,500 per ounce.

According to Tether CEO Paolo Ardoino, much of this growth has been fueled by strong demand from retail investors in emerging markets. Tokenized gold like XAUT allows individuals to own blockchain-based representations of physical gold without the complications of traditional storage or custodial arrangements. This innovation makes investing in gold more accessible to global users who lack access to conventional financial instruments such as exchange-traded funds (ETFs) or metals accounts.

Tether’s expanding gold reserves underscore a growing investor appetite for digital assets backed by tangible value. As market volatility and inflation fears persist, tokenized commodities like XAUT are emerging as a preferred hedge, blending the stability of physical gold with the flexibility and transparency of blockchain technology.