Tether creates $495 million batch of gold tokens

Tether has minted about $495 million of its gold-backed XAU₮ token, adding a large new batch of digital bullion as the market for tokenised gold expands.

Blockchain analytics firm Arkham identified the issuance on September 29, saying Tether’s latest mint involved XAU₮ rather than its much larger dollar-linked USDT stablecoin. The transaction comprised roughly 119,670 XAU₮ and was valued at about $494.6 million at the time, based on the on-chain data.

The size of the mint is substantial relative to XAU₮’s existing supply. Market data on September 30 showed about 809,000 tokens circulating, with a market capitalisation of roughly $3.4 billion. XAU₮ was trading near $4,180, broadly reflecting the value of the underlying precious metal.

The issuance does not, by itself, establish that the entire new batch has been sold to customers or entered circulating supply. Tether’s structure allows physical gold to be placed in reserve and corresponding tokens to be created before all of those tokens are distributed. That distinction is important when interpreting a large mint as evidence of immediate investor purchases.

XAU₮ is issued by TG Commodities, a Tether group entity registered in El Salvador. Each full token represents ownership of one fine troy ounce of physical gold on a London Good Delivery bar. Tether says the bullion is held in Switzerland and allocated gold can be identified by details including serial number, purity and weight.

The company’s published reserve framework says XAU₮ tokens are issued only after physical gold bars containing the corresponding fine troy ounces have completed the custodian’s intake procedure. The arrangement therefore differs from USDT, whose value is designed to track the US dollar and is supported by a broader portfolio of reserve assets.

Tether’s last quarterly XAU₮ update, covering June 30, showed 707,747.139 fine troy ounces of physical gold in reserve, equivalent to about 22.01 tonnes. Of the associated token inventory, 612,823.66 XAU₮ had been sold to customers and 94,923.43 remained available for sale. The reserve was valued at about $2.84 billion at the quarter-end gold price.

Customer holdings had increased by 53,225.02 XAU₮ during the second quarter, or 9.5%, even though the quantity of physical gold in the dedicated XAU₮ reserve remained unchanged. The increase came from tokens backed by bullion that had already been positioned in the reserve and was subsequently sold to customers.

The new mint, at roughly 119,670 tokens, is larger than the amount that was available for sale at the end of June, indicating a material expansion in token inventory since that reporting date. The precise composition of the dedicated reserve after the September issuance will require updated issuer disclosures; on-chain token creation alone cannot verify the quantity, location or custody status of off-chain bullion.

Tether publishes periodic reserve reports for the product. Its disclosures state that the gold meets London Good Delivery standards and that samples of the physical bars are subject to confirmatory testing by a qualified independent third party. The company also says the gold reserves belong to XAU₮ token holders rather than the issuing company.

The mint comes as tokenised gold has become one of the larger segments of the real-world-asset market. Market trackers placed the overall tokenised-gold category at about $5.6 billion around September 30, with XAU₮ accounting for the largest share. Its scale means a single issuance approaching $500 million can noticeably alter aggregate supply figures.

Gold itself was trading above $4,100 an ounce at the end of September after a volatile year, making each newly issued XAU₮ considerably more valuable in dollar terms than when bullion traded at lower levels. The token’s dollar price is not fixed and moves principally with gold, unlike conventional dollar stablecoins.