USDT issuer Tether and cryptocurrency lender Ledn have made plans to allow holders of Tether Gold (XAUT) to borrow against it later in the year, which will open a lending channel that taps into the stablecoin issuer’s $23 billion physical gold reserve.
Tether partners with Ledn
Lending platform Ledn announced that it will add XAUT to its platform alongside Bitcoin (BTC) and the dollar-pegged stablecoin Tether (USDT). This is expected to take effect before the end of 2026, and will allow XAUT holders to use their holdings as collateral for loans instead of selling the gold they hold.
Each XAUT token represents one troy ounce of physical gold stored in Swiss vaults, according to Tether.
The structure of this product reflects how Ledn has been dealing with bitcoin-backed lending over the past few years. Client collateral is held on a 1:1 basis and is not loaned out or used to generate a return, the company said.
Gold-backed lending has been controlled by central banks, large financial institutions and bullion dealers since forever. The Tether and Ledn partnership is betting on bringing the same concept on-chain, giving holders access to liquidity without being forced to sell their gold assets.
“As digital assets become an increasingly important part of the global economy, there is growing demand for solutions that combine long-term ownership with financial flexibility,” Tether CEO Paolo Ardoino said in a statement. statement.
Tether expands after the dollar
Profits from USDT, the world’s largest stablecoin, have funded expansion into areas far beyond dollar-pegged tokens.
The company has invested in precious metals market Gold.com, partnered with cryptocurrency finance company Antalpha on XAUT lending and physical redemption, and backed AI infrastructure provider Northern Data. Tether has also invested huge amounts of capital in Bitcoin mining and multiple renewable energy projects.
Tether’s lending product backed by physical gold reserves is expected to expand Ledn’s collateral options beyond its current asset backed offering.
At the time of writing, XAUT is trading at $4,070.34 per token.
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