Crypto Update | Alloy, the gold-backed stablecoin

On Monday, Tether introduced Alloy, a gold-backed stablecoin pegged to the US dollar. This marks the issuer's debut in Tether Assets. Alloy (aUSDT) can be minted through the new platform.

According to the company, Tethered Assets are designed to track the price of a specific reference value, such as the US dollar. This is achieved through stabilization techniques like over-collateralization, where collateral valued higher than the issued assets is held, along with secondary market liquidity.

Tether Gold (XAUt), a token representing ownership of physical gold, will support Alloy and maintain its value relative to the US dollar. Essentially, Alloy acts as a "synthetic" dollar, replicating the value and utility of the US dollar without directly backing it. This means there is no direct dollar-to-dollar support.