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On Tuesday, Tether introduced Scudo, a new unit of account for its gold-backed token XAUT, as gold prices reach record highs and interest in digital alternatives to gold continues to grow.
WITH GOLD PRICES RISING, TETHER LAUNCHES SCUDO FOR XAUT TRANSACTIONS
Gold prices leave no room for ambiguity. As of January 6, gold is trading at approximately $4,482 per troy ounce, continuing a rally that has attracted investors seeking protection from inflation, geopolitical tensions, and changing interest rate expectations.
Against this backdrop, Tether announced the introduction of Scudo, a smaller unit of account designed to simplify pricing, transfer, and potential use of its Tether Gold product, XAUT, as a means of exchange (MOE), not just a digital safe. Essentially, Scudo simply adjusts the denomination. One Scudo represents one-thousandth of a troy ounce of gold or one-thousandth of an XAUT token.
This means that at current gold prices per ounce, the value of a Scudo will be about $4.45 (rounded to the nearest cent). The idea is simple: working with long decimal fractions can be inconvenient, especially when gold prices are measured in thousands of dollars per ounce. Smaller units, at least in theory, make pricing more intuitive.
Tether presented this move as an effort to revive gold’s historical role in everyday trading, claiming that while faith in gold’s value remains strong, its use has long been a difficult issue. Digital tokens solved the storage and portability problems; Scudo is meant to address computational issues.
The comparison is familiar to cryptocurrency users. Just as satoshis made Bitcoin more divisible, Scudo aims to reduce gold to units that seem less abstract. Whether this will lead to significant daily use is another matter, but the logic of accounting is hard to dispute.
XAUT itself remains fully backed by physical gold stored in secure vaults, with ownership verified on the blockchain, according to Tether. The introduction of Scudo does not change the token’s backing or its structure; it simply alters how the value can be expressed and transferred.
In the growing tokenized gold market, XAUT is not alone. Its closest competitor is PAXG, a gold-backed token issued by Paxos. Currently, PAXG has a market capitalization of about $1.68 billion, compared to XAUT’s approximately $2.31 billion, highlighting the competitive race in digitizing gold bars.
On Tuesday, Tether introduced Scudo, a new unit of account for its gold-backed token XAUT, as gold prices reach record highs and interest in digital alternatives to gold continues to grow.
WITH GOLD PRICES RISING, TETHER LAUNCHES SCUDO FOR XAUT TRANSACTIONS
Gold prices leave no room for ambiguity. As of January 6, gold is trading at approximately $4,482 per troy ounce, continuing a rally that has attracted investors seeking protection from inflation, geopolitical tensions, and changing interest rate expectations.
Against this backdrop, Tether announced the introduction of Scudo, a smaller unit of account designed to simplify pricing, transfer, and potential use of its Tether Gold product, XAUT, as a means of exchange (MOE), not just a digital safe. Essentially, Scudo simply adjusts the denomination. One Scudo represents one-thousandth of a troy ounce of gold or one-thousandth of an XAUT token.
This means that at current gold prices per ounce, the value of a Scudo will be about $4.45 (rounded to the nearest cent). The idea is simple: working with long decimal fractions can be inconvenient, especially when gold prices are measured in thousands of dollars per ounce. Smaller units, at least in theory, make pricing more intuitive.
Tether presented this move as an effort to revive gold’s historical role in everyday trading, claiming that while faith in gold’s value remains strong, its use has long been a difficult issue. Digital tokens solved the storage and portability problems; Scudo is meant to address computational issues.
The comparison is familiar to cryptocurrency users. Just as satoshis made Bitcoin more divisible, Scudo aims to reduce gold to units that seem less abstract. Whether this will lead to significant daily use is another matter, but the logic of accounting is hard to dispute.
XAUT itself remains fully backed by physical gold stored in secure vaults, with ownership verified on the blockchain, according to Tether. The introduction of Scudo does not change the token’s backing or its structure; it simply alters how the value can be expressed and transferred.
In the growing tokenized gold market, XAUT is not alone. Its closest competitor is PAXG, a gold-backed token issued by Paxos. Currently, PAXG has a market capitalization of about $1.68 billion, compared to XAUT’s approximately $2.31 billion, highlighting the competitive race in digitizing gold bars.
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