Tether is pushing its tokenized gold product XAU₮ deeper into decentralized lending. Crypto lender Ledn has added support for XAU₮ alongside Bitcoin, USD₮ and USA₮, with gold-backed loans expected later in 2026. Users can hold, trade and eventually borrow against their XAU₮ tokens without selling the underlying bullion.
Ledn said the structure mirrors its Bitcoin-backed loans: client collateral stays 1:1 and is never lent out or farmed for yield. That design matters after the 2022 lending crisis where rehypothecation and weak risk controls left many users stuck.
“Demand is growing for solutions that combine long-term ownership with financial flexibility as digital assets become an increasingly important part of the global economy,” said Tether CEO Paolo Ardoino.
XAU₮ reserves surge in Q1; total gold exposure at $23B
The tokenized gold market has ballooned over the past year. Tether reported XAU₮ reserves of 707,747.139 fine troy ounces as of March 31, up from 520,089.350 ounces at end-2025. Market value jumped from roughly $2.25B to over $3.3B during the first quarter.
Tether's broader gold holdings across all products total about $23B. Reuters reported that Tether held approximately 132 metric tons of gold for USDT reserves at end-March (worth ~$19.8B), while XAU₮ accounted for about 22 tons. All physical gold sits in Swiss vaults; each XAU₮ token represents one fine troy ounce.
The move comes after Tether shut down Alloy and aUSDT, shifting focus to XAU₮. Users have until Sept. 17 to redeem aUSDT for XAU₮ before Alloy support ends.
Gold-backed lending goes on-chain
Using physical gold as collateral is standard in traditional finance—banks, bullion dealers and large institutions have done it for decades. Tether and Ledn are bringing that model to digital assets. Tokenized gold moves on blockchain rails while tracking ownership of physical bars held in custody.
Borrowers can pledge XAU₮ to receive stablecoins, keeping exposure to gold without selling. For Tether, this turns XAU₮ from a static tokenized holding into active collateral within crypto lending markets.
XAU₮ payment card and Tether's broader investments
Beyond lending, Tether and Fasset launched a Visa card with up to 6% cashback in XAU₮ for eligible users. That puts tokenized gold closer to everyday spending.
Tether has also backed Bitcoin mining, renewable energy, AI infrastructure, Gold.com and Antalpha as part of a wider push beyond stablecoins.