Tether has expanded the usage of its $23 billion gold reserves by bringing its tokenized product Tether Gold (XAUT) to crypto lender Ledn.
Ledn mentioned it’s including help for XAUT, alongside bitcoin and Tether’s stablecoin USDT, with borrowing towards XAUT anticipated later this yr.
Tether is making an attempt to monetize what has turn into one of many world’s largely privately held gold reserves. The stablecoin firm says it holds round $23 billion value of bodily bullion backing XAUT, with every token representing one troy ounce of gold saved in vaults in Switzerland.
Gold-backed lending is historically the realm of central banks, main monetary establishments and bullion sellers. Tether and Ledn argue that by tokenizing bodily gold, the asset can operate extra like bodily bitcoin as digital collateral, unlocking liquidity with out having to promote it.
This follows the mannequin Ledn has used for bitcoin-backed loans for a number of years. Consumer collateral continues to be held 1:1, with out being lent out or used to generate yield, Ledn mentioned, searching for to attract a line between the companies it gives and people of its former rivals that went to the wall within the crypto winter of 2022.