Tether launches ‘gold-backed’ stablecoin on Ethereum and Tron

Tether, the company behind the USDT stablecoin announced they would be launching a token backed by physical gold issued on Ethereum and Tron. One unit of Tether Gold will represent one troy ounce of gold that will be held in a Swiss vault. The website allows you to look up a token's Ethereum address to identify specifically which bar the token is backed by. However, there is no insurance on the products which puts token holders at risk in the event something happens to the gold.

Why it matters

• Tether has long been mired in controversy as a result of their relationship with Bitfinex and the backing of their USDT token. After claiming it was backed one-to-one by U.S. dollar reserves, they later reversed course to say it was only 74% backed. While Tether Gold exhibits improved transparency, the company's history will still be top of mind for potential investors.
• Gold-backed tokens have become more popular over the last year as Paxos and Coinshares both launched respective gold tokens.