The new asset is a response to the growing demand for more stable and transparent digital currencies.
Key Takeaways
- Tether's new gold-backed digital asset aims to enhance user confidence with blockchain technology.
- Tether's CEO sees the US election as pivotal for the future of the crypto industry.
One of the reasons Tether has chosen gold to back its new synthetic dollar, aUSDT, is its relative stability compared to Bitcoin, said Tether’s CEO Paolo Ardoino in a recent interview with Bloomberg.
“Gold is probably the best asset to make that happen because it’s much less volatile than Bitcoin. We put up to Bitcoin, but gold is then is probably a better choice for the short term,” explained Ardoino.
Introduced in June, aUSDT is over-collateralized by Tether Gold (XAUT) and is part of Tether’s new Alloy by Tether platform, which is intended for creating various tethered assets.
With the synthetic dollar, Tether seeks to increase confidence and transparency within the crypto market. Paolo believes that backing a digital asset with a tangible commodity like gold will instill greater confidence in users.
“It’s very, very important for us to research new ways of providing confidence to our user base and prove also to technology based on blockchain,” said Ardoino. “So until 1971, the US dollar was backed by gold.”
In addition, there’s a demand for alternative options to Tether’s USDT stablecoin, especially in countries experiencing economic instability, according to Ardoino. He noted that the new currency is meant to offer a more stable and transparent option.
“We see also the opportunity to provide an opportunity for others that want to see a more transparent backing of our synthetic dollar,” Ardoino added.
The introduction of aUSDT came ahead of the upcoming US presidential election, which Tether’s CEO believes will hugely impact the crypto industry.
“I think the election will be very very important for the crypto industry. We have seen all the candidates looking at the current state of cryptocurrency support in the US,” he stated.
Commenting on the regulatory environment surrounding US crypto businesses, Ardoino pointed out that the country has not always been supportive of crypto.
“I must say that the cryptocurrency industry in the US has not been very well supported until currently. We have seen actions against very important companies,” he stated.
“I’ve always seen the US as being the predominant country when it comes to all innovation…the country bringing forward all technological innovation,” Ardoino added. “And it feels weird that the US is not taking the very same opportunity in leading one of the most revolutionary technologies in the world.”
When asked whether regulatory reform like Donald Trump’s proposal or the implementation of safeguards or rules like Kamala Harris’ plan is more important, Ardoino said that innovation and government regulations need to go hand-in-hand. He believes good regulations can create a stable and secure environment for the industry to thrive.
“I think a mix of both is very important. You want to have regulations, good regulations that are supporting these powerful technologies,” said Ardoino.
