Tether, the parent company of the popular stablecoin USDT, has launched Alloy by Tether, a groundbreaking tokenization platform that brings real-world assets to users. The platform's flagship product is aUSDT, a synthetic dollar over-collateralized by Tether Gold (XAUt).

Alloy by Tether is a new token minting platform built on the Ethereum network, allowing users to create tokens collateralized by Tether's tokenized gold. The platform aims to integrate Alloy into Tether's digital assets tokenization platform, which is set to launch later this year.

The development is designed to redefine stability in the digital economy by combining the strengths of a stable unit of account with the security and reliability of gold. Alloy by Tether introduces a new type of cryptocurrency known as Tethered assets, which are designed to track the price of reference assets through various stabilization strategies.

One of these strategies is over-collateralization with liquid assets and secondary market liquidity pools. This innovative approach provides consistent value and stability between the reference asset and its tethered counterpart. For instance, aUSDT is over-collateralized by Tether Gold but designed to track the value of one US dollar.

The aUSD₮ smart contract offers transparency to users by keeping track of all collateral and minted tokens. This is done using Price Oracles to constantly evaluate the Mint to Value (MTV) ratio. The platform's uniqueness lies in the fact that it is backed by physical gold stored in Switzerland.

Tether highlighted that this innovative product is useful for users who want to perform digital transactions, payments, and remittances but prefer the feel of a currency they are comfortable with. The new development underscores Tether's commitment to offering innovative products to its users.

The firm is currently seeking a $1 billion investment to facilitate its venture into Artificial Intelligence (AI) and Biotechnology sectors in the near future. This follows its recent investment of $200 million in Blackrock Neurotech, a neural implant firm that rivals Elon Musk's Neuralink. Ultimately, the different additions reflect the firm's diversification beyond stablecoins.