What is Tether Gold (XAUT)?

Tether Gold is a token that represents gold. Each XAUT stands for one troy ounce of physical gold held in a vault in Switzerland. Its price follows the price of gold, not the dollar.

Where it came from

Tether Gold is offered by TG Commodities, part of the group behind Tether, the largest dollar stablecoin. Lesson 55 explains tokenised assets: real things represented by tokens.

How it works

• Backing. Each token is backed by one fine troy ounce of gold on a London Good Delivery bar, the standard used by the gold market. The bars are held in Swiss vaults, and each bar can be identified by its serial number, purity and weight.
• Blockchains. XAUT is a token on Ethereum and other networks (Lesson 9).
• Redemption. Verified customers can redeem directly, but only in large amounts: the minimum is 430 XAUT, about one full bar, with a 0.25% fee. They can ask for the gold to be delivered to an address in Switzerland or take cash instead.

Most holders never redeem. They buy and sell XAUT on exchanges, at a price that tracks gold.

What people use it for

People use XAUT to hold gold on a blockchain, move it between wallets and trade it around the clock. Gold itself is not crypto, so XAUT's price rises and falls with the gold market.

Risks to know

• You trust the issuer. You rely on TG Commodities actually holding the gold and honouring redemptions.
• Redemption is out of reach for most. With a 430-ounce minimum, small holders can only sell on exchanges, and the exchange price can drift from the gold price.
• Gold's own swings. Gold is less volatile than most crypto but can still fall.
• Legal setting. The issuer is based outside the UK, US and EU, which affects your rights in a dispute.

Learn more

Lesson 55 covers tokenised assets, Lesson 10 explains stablecoins, and the Tether guide describes the dollar token from the same group.