Alloy by Tether launched in 2024, and it allowed users to mint aUSDT using XAUT tokenized gold as collateral. New minting has been halted immediately, and users have until Sept. 17 to redeem their aUSDT and reclaim their collateral.
Tether Pulls Plug on aUSDT
Stablecoin issuer Tether is shutting down Alloy by Tether and its gold-backed aUSDT stablecoin less than two years after launch. The company is shifting its focus toward products with stronger market demand and more long-term growth potential.
The decision follows an internal review of user activity, liquidity, and strategic priorities. According to Tether, resources will now be concentrated on areas that have stronger adoption, including its flagship gold-backed digital asset, XAUT, and other core offerings across its ecosystem.
Announcement from Tether
Alloy by Tether was introduced in June of 2024 as an overcollateralized synthetic dollar platform built on top of XAUT. The system allowed users to deposit tokenized gold as collateral and mint aUSDT, a dollar-pegged asset backed by a larger value of gold holdings. Similar to decentralized finance lending protocols, users could access dollar liquidity without selling their gold exposure, effectively borrowing against their tokenized gold assets.
Despite the innovative concept, adoption was very limited. Tether reported that aUSDT currently has a market cap of only around $1.2 million and is backed by approximately 14.73 kilograms of gold worth about $2.2 million. As a result, the company decided to discontinue the product and redirect resources to areas that are generating more demand.
The shutdown process will take place in stages. Effective immediately, users can no longer open new Alloy positions or mint additional aUSDT. Existing users have until Sept. 17 to redeem their aUSDT and reclaim their underlying XAUT collateral before the platform is fully wound down.
The closure of Alloy is only one of many product closures at Tether. Over the past few months, the company also discontinued its Chinese yuan-pegged stablecoin, CNHT, due to low demand and changing market conditions. Last year, it similarly phased out its euro-backed stablecoin, EURT, due to regulatory challenges in Europe and a strategic shift toward other initiatives, including its Hadron asset tokenization platform.
At the same time, Tether is also expanding beyond stablecoins. The company has invested heavily in sectors like Bitcoin mining, artificial intelligence, cloud computing, and robotics. Most recently, it led a $1 billion funding round for German robotics company NEURA.
Although Alloy by Tether is coming to an end, the company’s investment in tokenized gold and emerging technologies suggests it is still focused on developing products and sectors where it sees the most potential for future growth.
