Tether and Ledn are collaborating to introduce tokenized gold into the crypto lending sector. Announced on June 18, this partnership integrates Tether Gold, designated as XAUT, into Ledn’s platform alongside Bitcoin and stablecoins. Anticipated gold-backed loans are set to launch later this year.
How does this initiative work?
Upon launch, users of Ledn can trade and store XAUT directly on the platform. Each token corresponds to one fine troy ounce of gold, with a current backing of 707,747 ounces, all matching the number of tokens in circulation.
Further into 2026, Ledn aims to introduce loans backed by gold and denominated in Tether’s stablecoins. Borrowers will have the option to select between USDT or the newly launched USAT.
Ledn adheres to a strict 1:1 collateral policy, ensuring that they do not rehypothecate or lend out the collateral that supports user deposits. However, customers from Canada and the EU should note that this lending product will not be available to them.
What is the significance of the gold backing?
Tether oversees a gold reserve valued between 140 and 154 metric tons, approximating $23 billion. The market cap for XAUT has recently exceeded $3 billion, positioning it as a prominent commodity-backed token in the cryptocurrency realm.
Understanding the implications for investors
The landscape of crypto lending has undergone recovery since the upheavals of 2022, when companies like Celsius, BlockFi, and Voyager demonstrated how risky rehypothecation practices could destabilize an entire sector. Ledn emerged from this turmoil, partly due to its cautious collateral management strategy.
Paxos Gold (PAXG) directly competes with XAUT in the tokenized gold arena. However, it currently lacks a comparable lending integration, creating an opportunity for Ledn.
The introduction of USAT as a loan option indicates that Tether is committed to establishing an interconnected ecosystem that integrates its various products, enhancing user experience and operational capacity.