Last updated on December 23rd, 2023 at 12:34 pm
Key Takeaways:
- Tether Gold Token can simply be described as gold on the blockchain, thereby decentralizing access to gold.
- One XAUt token is backed by one troy ounce (31.1035 grams) of gold.
- XAUt can be traded on exchanges such as BitForex.
- Tether Gold (XAU₮) is the best way to hold Gold.
- All the gold-backed reserve is stored and protected by a vault in Switzerland.
What is Tether Gold (XAU₮)?
Tether Gold (XAU₮) is a form of stablecoin backed by physical gold which provides you ownership on a 1:1 basis of one fine troy ounce of gold on a physical bar of gold.
The power of blockchain technology gives you access to a stablecoin, which provides ownership of physical gold.
There are many drawbacks associated with physical gold, such as scarcity, high storage costs, and seemingly exclusive assets of wealthy people.
But by putting gold on a blockchain, just like the US Dollar (USDt) and a few other fiat currencies have been put on the blockchain, the issue of limited accessibility has completely been removed.
Want to explore the possibility of ownership of gold, the benefits, how to buy it right on your mobile phone, and be in the league of gold owners? Here is all you need to know about Tether Gold (XAUt) and how it works.
The Motivation Behind Tether Gold Creation
Tether Gold exists because there has already been gold. And Gold has been in existence as far as the existence of men because of its value.
Gold was once seen and treated as being synonymous with “money”. It is of immense historical significance.
Gold is mentioned prominently more than 400 times in the Bible. Kings and warriors use gold to show off their wealth and level of influence.
Some of the Biblical verses about Gold include:
In Genesis 2, verses 11-12 says, “The name of the first is Pison: that is it which compasseth the whole land of Havilah, where there is gold;And the gold of that land is good: there is bdellium and the onyx stone.”
In Psalm chapter 45, verse 13, “The king’s daughter is all glorious within: her clothing is of wrought gold.”
Second Samuel, chapter 8, verse 7, it gives us a picture of the opulence of King David, “And David took the shields of gold that were on the servants of Hadadezer, and brought them to Jerusalem”.
This tells you how precious, resilient, and valuable gold has been since time immemorial. Possessing a portion of gold means wealth and class since humans existed.
The Unbundling of Gold
Gold used to be synonymous with “money”, but not any more. Countries now have their legal tender (monies), with each of the monies used predominantly only within national boundaries.
The national systems of money were originally based upon redeemability to fixed amounts of gold, either directly or via a peg to the U.S. dollar.
The idea behind paper money was to represent physical gold in a manner conducive to transacting.
Another problem came up: trust in scarcity. There were geophysical limits to the supply of physical gold which do not apply to gold-representative paper.
Many problems arose because of the old way of trading gold against the U.S. dollars and other dishonest and manipulative schemes, gold was unbundled by TG Commodities Limited.
The unbundling led to deploying the modern technology – blockchain – to decentralize gold which birthed XAUt token.
The invention of Tether Golds can simply be described as a natural progression in the evolution of money, thereby reducing the physical cumbersome associated with gold.
The Launch of Tether Gold Token
On January 23, 2020, Tether Gold Token was officially launched by Tether Operations Limited, the same company behind Tether USDt Token.
At the time of XAU₮ launch, Tether USD was already the most widely used cryptocurrency. Therefore, analysts predicted that XAUt would be a success because there would be a global adoption.
In an announcement, the Tether stated that:
Building on a track record for product innovation, each XAU₮ token represents ownership of one troy fine ounce of physical gold on a specific gold bar.
Is XAUt redeemable?
XAUt is redeemable by actual physical Gold, thereby making it possible for gold to be easily traded and transferred.
The minimum redeemable amount is 370 XAU₮. As such, you are expected to deposit an amount equal to 370 XAU₮ or greater than the minimum. Anything below means you would not be able to redeem the deposited amount.
Don’t worry, you can use the exchange to start trading Tether Gold. You don’t need to have thousands of dollars to start getting involved in XAUt. You only need 370 XAU₮ if you want to get a physical gold.
When Was XAUT Listed for Trading?
On Friday, January 24, 2020 – a day after the launch of Tether Gold – XAUt was listed for trading on Bitfinex, Tether’s sister company.
Bitfinex is a global cryptocurrency exchange. The exchange made it easy for you to buy XAUt with USD (XAUt/USD), USDt (XAUt/USDt), and BTC (XAUt/BTC).
Difference Between XAUt and USDt
Difference: USDt is pegged and backed by the US dollar, XAUt is backed by physical gold and pegged to one troy ounce of gold to one token.
While this is the major difference, several qualities and features differentiate the two from each other.
Similarity: XAUt and USDt are stablecoins issued by the same company (Tether). XAUt is a way of decentralizing gold ownership just like cryptocurrency has decentralized finance.
How Tether Gold (XAUT) Works
Every whole token of XAUT is equivalent to one troy fine ounce of London Good Delivery gold bar, and a token can be fractionalized up to six decimal places, which is as small as 0.000001 troy fine ounce.
Tether Gold is available on exchanges and can be traded. And the owners of the token can issue a request to get the physical form of the gold.
But there is an exception.
Any investor who wants to get the physical form of their gold will have to sign up on Tether official site to submit a request form.
Case Uses of XAUt Tokens
Donate Tether Gold to NGOs
Several non-profit organizations accept crypto, including Save the Children US, 1000 Dreams Fund, and African Enterprise among others. You can donate XAUt tokens to them.
Trade:
There are many trading pairs for Tether Gold on crypto exchange such as BitForex and Bitget to meet your needs.
Send Tether Gold
You can buy Tether Gold online and send it to anyone and anywhere with their Tether Gold address.
Mode of payment
As XAUt tokens become more popular, we are going to see more payment platforms accept Tether Gold as a means of payment.
Store for Future use
You can hold on to your Tether Gold with the expectation that the value will increase in value over time. You can store XAUt tokens for your kids, you can do so by moving your XAUt tokens using a decentralized app.
Benefits of Tether Gold
Easy Verification:
All physical gold that backs XAUt tokens can be tracked on Tether’s website; you can verify your gold allocation in Tether’s vaults.
All you need to do here is to copy the Ethereum address of your XAUt and paste it on the “Gold allocation lookup”” tool and click “lookup”
Accessibility:
XAUt has made access to gold easy, making it available in the hands of everyone who has the money. Transporting your XAUt tokens is as easy as taking your other crypto-assets with you, whenever you need to.
Institutional ownership:
Central banks around the world continue their precious metal purchase to edge inflation and for effective monetary management.
For instance, Russia’s continued purchase of gold is borne out of its strategic move to reduce the effect of economic sanctions imposed on it by the U.S. and its allies.
But then, other countries that buy gold for economic and monetary reasons include China (with more than 2,000 tons), Malaysia, Thailand, Turkey, and Poland.
The move by these countries to allocate their sovereign wealth into gold instead of U.S. Treasury bonds underscores a broader trend of diversifying reserve assets and reducing reliance on traditional financial instruments.
With Tether Gold (XAU₮), it even becomes easier for countries to scale their gold ownership. Tether Gold is a modern gold holding.
Easy Storage:
There are three types of gold storage options for gold investors, they include; home storage (whereby you lock your gold in a safe); bank storage (stored in a bank vault), and by using precious metals depository.
Because of the risks associated with home storage, big investors prefer bank storage. But then, bank storage comes with a cost. It cost at least $120 to store $100K holding of gold in a bank, according to onegold.com
But by putting gold on blockchain, storing your XAUt tokens is as easy as storing your other currency assets. You only need to protect your wallet keys.
Easy Divisibility:
While it is difficult to split up your physical gold bars, XAUt tokens are divisible into increments as small as 0.000001 fine troy ounce of gold.
It Align With Digital Transformation
Similar to how real estate has been put on blockchain for transparency, putting the once cumbersome gold on blockchain aligns with the modern digital transformation. It is a modern investment strategy.
24/7 Availability:
XAUt tokens are available for trading on exchanges that list tether golds 24/7 per week and 365 days per year from any part of the world.
No custody fee:
Tether, the innovators behind Gold Stablecoin, doesn’t charge custody fee nor gas fee for XAUT users.
XAUt is redeemable:
If you buy XAUt, you can redeem it for physical gold, which can be delivered to your designated address in Switzerland or sold into USD by Tether on your behalf, if you bought $100,001 or more.
How Secure Is Tether Gold?
Tether Gold is secured. The price of XAUt is backed by gold held in a Swiss Vault under the control of Tether.
In terms of the technology behind it, it is an ERC-20 token on the Ethereum blockchain and as a TRC20 token on the TRON blockchain.
As such, it is available on the Ethereum Network in Decentralized Applications (dApps) and Ethereum’s smart contracts.
How Can I Keep My Tether Gold?
Tether Gold (XAUT) can also be transferred to any Ethereum address or wallet and is available using numerous transport protocols.
If your preferred network address is ERC-20 (Ethereum blockchain), make sure that your sender uses the same network address.
Receiving Gold Tether through any other network address will result in a permanent loss
The two network addresses are:
- ERC-20 token on the Ethereum blockchain
- TRC20 token on the TRON blockchain.
Where Can I Buy Tether Gold Tokens?
Exchanges where you can buy XAUt are:
- Tether website
- Yellow Card Crypto App
- BigOne
- BingX
- BitcoinVN
- XT.com
- BitFinex
- BitGet
- Okx
- BTSE
- Coinstore.com
- DigiFinex
- Enor
- ICRYPTEX
- Gate.io
- Giottus
- Huobi
How To Buy Tether Gold on Tether Official Site
You can buy Tether Gold through the official website by following these step by step guide:
- Go to the official website of Tether Gold at gold.tether.to and sign up with your name, email address and create a strong password for your account.
- Select either an individual or corporate account, if you’re buying for yourself, choose “individual.
- Check your inbox to verify your email address.
- After accessing your account, head straight to the security page to set up 2 factor authentication. You can’t make a purchase until two-factor authentication is set up.
“If you wish to acquire or redeem USD₮, your account must be verified in order to comply with relevant anti-money laundering (AML) and counter terrorism financing (CTF) laws and regulations.”
Verification Documents for Individual Accounts are Two forms of photo identification, Proof of residency, and Bank Statement
Verification fee 150 USD₮ (or equivalent EUR₮, CNH₮, MXN₮). The verification fee is not refundable. You are advised to read Tether’s T&C before starting the verification process.
- Go to the home page and click on the acquire button
- On the acquire section, you will need to provide the wallet address that will receive the Tether gold tokens and type in the amount.
- You can only purchase a minimum of 50 XAU₮ or 50 troy ounces per request.
- You will need to enter your financial details to pay for the number of gold you selected.
- Once the process has been finalized, you must wait about to receive your assets.
If you would like the physical gold delivered to you, extra charges apply.
How to Buy Tether Gold on Yellow Card Crypto App
- Download Yellow Card crypto App, sign up and verify your account
- Login to your Yellow Card app and click Deposit to fund your account with your local currency through bank transfer. For Nigeria, the minimum deposit is N500
- Click to confirm that deposit has been made.
- Check your Yellow Card wallet balance
- On the dashboard, click “crypto” and select Tether Gold
- Then click the “Buy” option.
- Enter the amount you want to buy
- Confirm your order and place order
- The quantity of Tether Gold you just bought will reflect on your wallet.
How to buy Tether gold on OKX
- Register and verify your identity
- Buy USDT
- Use your USDT to buy Tether Gold token
- Click the trade option and choose convert
- Select USDT as your base coin
- The amount of tether gold you will receive will be displayed
- Confirm the transaction
How to buy Tether gold on BitFinex
You can buy XAUt instantly with your credit card on Bitfinex with a minimum purchase of $25.
- If you already have Bitfinex Log in to your account or sign up to Bitfinex.
- Go to Deposit, and choose Payment Cards.
- Select the payment processors.
- Choose the crypto and enter the amount
- Select the destination wallet and proceed payment
- Confirm the transaction and check your XAUt wallet
Risks of Buying Tether Gold Tokens
1) Like other crypto assets, XAUt tokens are speculative and involve a high degree of risk and uncertainty.
2) You can lose your entire holdings, only invest what you can bear to lose
3) If you are careless with your wallet keys, you can lose your entire Tether Gold Token.
4) You may lose your XAUt tokens if you use a compromised exchange or share your wallet passwords on a public forum.
