Tether has announced that it will launch Tether Gold (XAUT) and Tether Euro (EURT) on the crypto exchange Huobi Global.
With these two new listings, Huobi customers will have access to two new stablecoins, one replicating the price of physical gold, and the other representing the euro.
Tether Gold (XAUT)
XAUT, or Tether Gold, is the token that replicates the price of XAU gold.
XAU in fact is the symbol for the troy ounce of gold, commonly taken as a reference for the price of physical gold in dollars.
Tether therefore stores one ounce of gold for each XAUT token issued, so that its value should exactly replicate that of XAU.
For example right now one ounce of physical gold in the traditional markets is trading just under $1,770, while in the crypto markets an XAUT token is trading just under $1,720. Thus there is a slight 2.8 percent mismatch between the toke and gold prices.
Tether Gold has been trading since late January 2020, when it was worth about $1,580, compared with a gold price then just above $1,580.
Since March of this year, however, some disconnects have occurred. At first, which lasted until July, XAUT went as high as 1.03 XAU, while in August it fell below 0.96 XAU.
Between September and October it returned to 1.03 XAU, while in the days of the FTX collapse it fell back to 0.96 XAU.
Thus, it is a gold-anchored stablecoin whose value, however, over the course of 2022 fluctuates between -3% and +3% relative to that of the troy ounce of gold.
With a market capitalization of less than $425 million, it is not the largest gold-anchored stablecoin, as PAX Gold (PAXG) is close to $480 million. The distance between the two, however, is quite small, with PAXG being less volatile than XAUT.
EURT, or Tether Euro, on the other hand, is trivially a euro-collateralized stablecoin.
Its value is fairly stable over time, with one exception beginning in mid-October this year that brought its value down to below €0.98 on November 15. However, it later recovered its peg with the euro.
It has a market capitalization of just under $57 million, which is hugely less than the more than $65 billion Tether Dollar (USDT).
Then again, dollar stablecoins are far more widely used in the crypto markets than euro stablecoins. Suffice it to say that the most capitalized euro stablecoin is Stasis euro (EURS) with just over $128 million.
Tether issues two other stablecoins in addition to USDT, XAUT and EURT, namely CNHT, pegged to the Chinese Yuan, and MXNT, pegged to the Mexican peso.
Huobi is a Chinese crypto exchange active since 2013 that, due to China’s ban on crypto trading, had to suspend operations in the motherland.
It thus created an international version, called Huobi Global, which to date has over 500 digital assets, with an average daily trading volume of over $2.6 billion.
It is by far one of the twenty largest crypto exchanges in the world, serving primarily the Asian market. Indeed, among the exchanges in use in East Asia, it is by far one of the largest.
It not only provides spot trading of tokens, but also allows trading of derivatives, such as futures, margin trading, OTC trades, staking, crypto loans, and so on.
It also hosts a variety of decentralized finance (DeFi) projects, including the decentralized lending platform Lendhub, and the decentralized and cross-chain trading platform MDEX.
About the listing of XAUT and EURT on Huobi, Tether CTO Paolo Ardoino, said:
“We are excited to launch XAU₮ and EUR₮ on one of the world’s oldest and leading exchanges. By gaining access to the stablecoin that represents physical gold ownership and the European stablecoin that is backed by the same company behind the first most stable and reliable stablecoin, we believe the Huobi community will be poised to thrive and continue to grow.”
Although there has been strong criticism of Tether for years now, often accused of creating stablecoin tokens out of thin air to manipulate crypto markets, the company continues to operate without apparent problems.
The fact is that there is actually no hard evidence to support these accusations, which so often end up looking like merely fabrications artfully created to make FUD.
Moreover, for months now, Tether has been publishing audits by independent companies certifying its reserves, which are equal to or greater than the market value of the tokens issued.
During this 2022, particularly following the implosion of the UST algorithmic stablecoin, many were afraid that USDT might implode as well, so much so that they demanded its return of nearly 20 billion. Tether seems to have had no problem with repaying such a large amount in full and quickly, thus sweeping away many of the fears.
In fact until the FTX collapse the market capitalization of USDT had then returned to growth, but during November it eventually fell back to annual lows again.