Tether Discontinues Gold-Backed aUSDT to Prioritize Core Liquidity Assets
According to CoinMarketCap, Tether will phase out Alloy by Tether and its gold-backed aUSDT stablecoin, ending roughly two years on market.
Clarence Bingham·updated August 16, 2026
The shutdown was announced June 17 following a review of user activity, market demand, and broader business priorities, signaling tighter concentration around assets with deeper liquidity. aUSDT launched in June 2024 as an overcollateralized stablecoin minted on Ethereum against XAUT collateral; at announcement, it carried a market cap near $1.2 million backed by approximately 14.73 kilograms of gold valued at roughly $2.2 million — a collateralization ratio above 1.8x.
Capital Reallocation
Phase one took effect immediately, blocking new positions and additional minting. Existing holders have until September 17 to redeem aUSDT for underlying XAUT collateral; after that date, no platform-level redemptions will be processed.
Tether stated resources would shift toward products with stronger demand and deeper liquidity, naming XAUT specifically among its core lineup. XAUT holds a market capitalization near $3 billion, backed by 22,169 kilograms of physical gold. The token's valuation spiked earlier this year when gold reached an all-time high near $5,300 per ounce; XAUT has since retraced approximately 19% from that peak. aUSDT's $1.2 million cap stood at roughly 0.04% of XAUT's footprint, illustrating the demand gap between the two gold-linked instruments.
Direction of Travel
The reallocation aligns with Tether's relocation to El Salvador, per Yellow.com, where CEO Paolo Ardoino cited the country's DASP licensing regime and Bitcoin-friendly posture as enabling focus on emerging markets. Tether has previously engaged with Salvadoran authorities on a 2023 citizenship-by-investment program and a $1 billion Bitcoin mining venture leveraging volcanic energy.
For holders tracking operational implications — from retail users to international participants managing positions across jurisdictions — the checklist is narrow: confirm wallet access, verify aUSDT holdings before the September 17 redemption cutoff, and prepare to receive XAUT rather than USDT. Secondary market liquidity for aUSDT outside Alloy remains unconfirmed at this stage.