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Tether and Ledn partner to launch Tether Gold (XAUT)-backed loans allowing users to use XAUT as collateral to get loans.
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XAUT-backed loans will launch later this year, following Ledn’s Bitcoin-backed lending model.
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The tokenized gold market has grown to $4.64 billion, with Tether Gold controlling nearly 54% of the sector.
Tether XAUT Loans:- In a major update for XAUT, Tether has announced a partnership with crypto lending platform Ledn to introduce loans backed by Tether Gold (XAUT).
The partnership will allow users to borrow against tokenized gold instead of selling their holdings.
Alongside the launch of XAUT-backed loans, Ledn has also enabled users to hold, trade, and swap Bitcoin, Tether Gold (XAUT), USDT, and USA₮ directly on its platform. Users can now receive and repay loans in USDT and USA₮, simplifying the borrowing process.
The move extends Tether’s tokenized gold strategy beyond simply holding bullion. It opens the door for XAUT to be used as productive collateral within crypto lending. Here’s how
What Are XAUT-Backed Loans?
As per Ledn’s official blog, XAUT-backed loans allow holders of Tether Gold (XAUT) to borrow funds without selling their tokenized gold. Instead of liquidating their holdings, users can pledge XAUT as collateral. They can then receive a loan while maintaining exposure to movements in gold prices.
According to Tether, the company has issued more than 8 million XAUT tokens, thus all the users of these XAUT tokens can avail loan at Ledn. The move also comes shortly after Tether decided to win down aUSDT, a dollar-pegged Stablecoin which was backed by Tether Gold (XAUT).
The launch significantly expands the utility of XAUT, which is backed 1:1 by one troy ounce of physical London Good Delivery gold stored in Swiss vaults.
Tether’s latest attestation shows the company holds nearly 140 metric tonnes of physical gold, worth approximately $23 billion at current market prices. The reserve makes Tether one of the largest non-sovereign holders of gold globally.
The move also includes tokenized gold as a key asset in the rapidly growing crypto-backed lending markets. However, XAUT-backed loans are not launched yet. They’re set to go live later this year.
How Do Tether Gold (XAUT) Loans Work?
Ledn said it will apply the same custody and risk management framework to XAUT-backed loans as with its Bitcoin-backed loans. It will never use collateral for lent out or used to generate yield.
As part of process of getting a XAUT-backed laons, users deposit their XAUT tokens on Ledn’s lending platform as collateral. Based on the value of those tokens, Ledn gives them a loan. The platform keeps checking the loan-to-value (LTV) ratio to manage risk.
