Tether winds down Alloy and aUSDT, halts new minting

Tether announced it will wind down Alloy by Tether and its gold-backed derivative stablecoin aUSDT, stopping new minting immediately. Holders have three months, until Sept. 17, to return aUSDT and reclaim XAUT.

The company said the decision followed a review of user activity, market demand and its broader priorities. Tether plans to reallocate resources to products it identifies as having stronger user demand and deeper liquidity, including its gold-backed digital asset XAUT and other core products across its ecosystem.

Alloy by Tether and aUSDT were introduced in June 2024. aUSDT was an overcollateralized derivative built on XAUT using Ethereum smart contracts. Users could lock XAUT as collateral to mint aUSDT, with the value of locked XAUT exceeding the value of aUSDT issued, allowing holders to access dollar-like liquidity without selling their gold exposure.

Tether reported aUSDT has a market capitalization of about $1.2 million and is backed by roughly 14.73 kilograms of gold, with an estimated value around $2.2 million. XAUT, by contrast, has a market capitalization near $3 billion and is backed by 22,169 kilograms of physical gold. XAUT’s market cap rose earlier this year when gold reached an all-time high above $5,300 per ounce; it has since declined about 19%.

The wind-down will proceed in phases. The first phase starts immediately with a freeze on opening new positions and on minting new aUSDT. Tether said it will communicate further phases and timing to users as the process continues.

Earlier product changes this year included the discontinuation of the Chinese yuan stablecoin CNHT in February, which Tether attributed to low interest and limited sustained demand. The company wound down its euro stablecoin EURT in November, citing European regulatory issues and a focus on other initiatives such as Hadron, its asset tokenization platform launched in 2024. In May, Tether announced plans to launch a Georgian lari stablecoin, GELT, in cooperation with Georgia’s government.

Tether has expanded activities beyond stablecoins, investing in Bitcoin mining infrastructure, artificial intelligence, cloud computing and robotics. The company led a funding round for German tech firm NEURA on June 11 and in February acquired a 12% stake in precious-metals platform Gold.com for $150 million, with plans to integrate XAUT into that platform.

Tether said it will continue to support XAUT during and after the transition and will manage an orderly wind-down of Alloy and aUSDT while shifting resources toward the products it has identified for further development.