When you say digital gold people immediately think of Bitcoin, and for good reason! Bitcoin has fundamentally transformed the way we store value and transact over the internet.
However, Tether Gold:XAUt is another approach to digital gold; physical gold, represented by XAUt tokens. Tether launched XAUt to make physical gold more compatible with the needs and advantages of our digital world.
Tether Gold, is not in competition with Bitcoin in being the best digital gold, but it's actually in competition with the Dollar to be the best stablecoin.
XAUt represents a return to the gold standard as it allows users to easily store, transact, and save in gold. This is further enhanced by the ability to trade it digitally, even against Bitcoin.
Each XAUt token represents one fine troy ounce of a London Good Delivery bar. XAUt tokens can be transferred and traded freely after purchase dramatically improving the ability of individuals and institutions to freely transact in gold.
XAUt tokens provide a more robust claim to physical gold than gold futures because each XAUt is associated with a specific, unique, gold bar.
In an increasingly digital world, it's easy to forget why gold has been an attractive investment for most of human history.
The gold standard had many benefits that contemporary economics has overlooked. One major benefit was that by constraining the supply of money, people were able to save money without it losing value.
Today, cash must immediately be converted into assets (stocks, bonds, real estate, etc) which all carry their own risks.
XAUt allows users to easily convert their savings into gold via XAUt tokens. This allows effective saving in gold, as during the gold standard.
It’s important to recognize that almost all central banks and many countries hold significant amounts of gold in their sovereign reserves. They own gold to prepare for a time when the global financial system decides to switch to a neutral reserve asset, instead of a reserve asset issued by a specific country.
Even if you (and we) believe that Bitcoin will eventually become the world’s primary neutral reserve asset, it's pragmatic to expect that gold will still play a key role.
If the world switches to a neutral reserve asset, gold will be a prime beneficiary alongside Bitcoin in this increasingly likely scenario.
XAUt is Gold Made Easy
Even if we agree that gold has a role in a portfolio, how do we overcome its challenges? Gold is very difficult to store, verify, and transact with due to its physical nature.
XAUt is a digital token backed by physical gold, and as such it inherits all of the monetary properties of blockchain-based assets.
XAUt can be stored by the individual in any digital or hardware wallet they use to store ERC-20 tokens. This means that users can store their own gold!
XAUt also allows a user to easily transact with their gold. Value in gold can be sent anywhere in the world with the click of a button by transferring XAUt tokens. Unlike gold, users can send fractions of a XAUt token which means they can transact any amount of value from their gold holdings.
Similarly, users can convert Bitcoin to XAUt, and XAUt to Bitcoin with a few clicks of a button.
One of the largest challenges behind owning a gold bar or coin is that you can’t ever spend or sell a piece of it. XAUt removes this challenge by making gold as divisible as any other digital asset.
Finally, XAUt is highly portable, unlike physical gold. XAUt tokens can be carried in your pocket, anywhere you need to go. People have historically held gold as a way to escape politically unstable countries, but while the gold may have empowered them to protect their savings it is almost impossible to leave a country with a meaningful amount of gold.
Imagine trying to flee a country with 10 gold bars in your luggage! It will be confiscated or stolen. XAUt empowers users around the world to easily convert their savings into gold and take it with them anywhere they go.
Using Gold in the Digital Economy
As the global economy became increasingly digital, it became significantly harder for gold to have a meaningful role because it wasn't compatible with modern financial systems. In a world where all value is settled digitally, the best the world could do was create flawed gold derivatives.
XAUt is a native blockchain asset that can plug into any smart contract, any exchange, any wallet, and any future innovations yet to come!
This means that unlike a gold bar in a vault, XAUt can potentially be used to generate yield or as collateral to borrow against. De-Fi applications make it easy to earn yield on tokens because they can easily function as collateral.
As De-Fi applications continue to grow, more use cases will emerge that could only be accessed by a digital, tokenized version of gold. These services make gold more attractive as an asset, and XAUt provides users with that access.
A Digital Gold Rush is Inevitable
The world is facing the highest levels of structural inflation it has faced in decades. While no one can know for certain what the futures hold, many of the smartest economic minds in the world expect that inflation is here to stay.
Gold has historically been the standard for an asset that provides protection against inflation, and while it now shares that role with Bitcoin, it’s unlikely gold will stop being used any time soon.
The biggest problems gold faced were due to its physical nature, which made it hard to invest in and prevented it from being utilized in the rest of our financial systems.
XAUt turns that entire dynamic on its head! By making gold as easy to own and use as any other digital asset XAUt reinvigorates the appeal of gold as an investment asset in our digital world.
This allows an easy return to a personal gold standard for those users who prefer to save in gold.
As the creator of the other digital gold once said, “You may want to get some, in case it catches on”.
Driving the Future of Money
Tether supports and empowers growing ventures and innovation throughout the blockchain as a digital token built on multiple blockchains.