Tether, the issuer of the world’s largest stablecoin USDT, expanded its tokenized gold holdings to over 11.6 tons during the third quarter of 2025, according to company data. The firm’s gold-backed token, Tether Gold (XAUT), saw its market capitalization surge past $2 billion, reflecting growing investor interest in digital representations of real-world assets like gold.
Issued by TG Commodities under El Salvador’s digital asset framework, each XAUT token is pegged 1:1 to a fine troy ounce of physical gold stored in Switzerland. As of September 30, Tether’s gold reserves totaled more than 375,000 ounces, ensuring full backing for every token in circulation.
The milestone highlights how investors are increasingly turning to tokenized commodities as a safe-haven asset amid global economic uncertainty.
Gold-Backed Token Demand Surges Across Emerging Markets
In an interview with CoinDesk, Tether CEO Paolo Ardoino explained that the rapid rise in XAUT’s market capitalization was primarily driven by retail investors in emerging economies seeking exposure to gold without the challenges of traditional storage or custodianship.
“Demand for tokenized gold has been accelerating, especially in countries where access to financial products like ETFs or metal accounts remains limited,” Ardoino said.
Emerging markets such as Turkey, India, and parts of Latin America have shown heightened interest in digital gold products. For many investors, tokenized gold serves as both a store of value and a hedge against inflation and currency depreciation, making it an attractive alternative to traditional gold investment methods.
Inflation, Geopolitical Tensions, and Central Bank Demand Fuel the Rally
The recent rally in both physical gold and XAUT coincided with a broader macroeconomic shift. In 2025, gold prices soared above $4,500 per ounce, fueled by persistent inflation, global supply chain disruptions, and increasing demand from central banks diversifying away from the U.S. dollar.
Investors sought refuge in tangible assets as global uncertainty intensified, with geopolitical tensions and slowing economic growth amplifying the appeal of gold. This environment boosted not only traditional bullion markets but also digital gold tokens like Tether’s XAUT.
As a result, XAUT’s market capitalization climbed more than $1.4 billion in Q3 alone, continuing its upward trajectory into October.
How Tokenized Gold Works
Tokenized gold allows investors to own digital representations of physical gold on a blockchain, combining the stability of a tangible asset with the flexibility of digital finance.
Each Tether Gold (XAUT) token represents ownership of one troy ounce of physical gold, fully backed by reserves stored in secure Swiss vaults. Token holders can verify the gold’s authenticity and storage details through blockchain transparency, reducing reliance on intermediaries.
Unlike traditional gold ETFs, which are tied to centralized institutions, tokenized gold offers direct digital ownership, enabling users to trade, transfer, or hold their assets in crypto wallets. This accessibility has proven especially valuable in markets where banking infrastructure is limited or regulatory restrictions hinder access to traditional investment products.
Tokenized Assets Gain Traction in Global Finance
The success of Tether Gold reflects a broader industry trend toward real-world asset tokenization (RWA) — the process of issuing blockchain-based representations of tangible assets such as commodities, bonds, or real estate.
According to multiple market studies, the tokenized asset market is expected to reach trillions of dollars within the next decade, with stablecoins and gold-backed tokens leading the charge.
For Tether, diversification beyond USDT is part of a strategic effort to expand its ecosystem and solidify its role in the digital asset economy. Alongside gold, the company has explored tokenized treasury products and other on-chain instruments aimed at bridging the gap between traditional finance and blockchain.
A New Chapter for Gold and Digital Finance
Tether’s growing gold reserves underscore how traditional and digital finance are increasingly converging. By merging the stability of physical gold with the accessibility and transparency of blockchain, XAUT provides a modern, borderless way for investors to safeguard their wealth.
As global economic uncertainty persists and central banks continue to diversify their reserves, gold-backed digital tokens like XAUT are likely to play an expanding role in both institutional and retail portfolios.
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