Tether (USDT) Has Confirmed That Its Tether Gold (XAUT) Token Is Backed by 7.7 Tons of Physical Gold

In the first quarter of 2025, Tether acquired 7.7 tons (246,523.33 troy ounces) of London Bullion Market Association (LBMA)-certified gold, as confirmed by the company’s first Q1 attestation report.

The statement, prepared in accordance with El Salvador’s legal and regulatory framework, details the allocation of the gold to support Tether Gold (XAUT) tokens. Each XAUT is pegged 1:1 to one troy ounce of physical gold, emphasizing the direct backing for the tokenized asset.

The statement also mentions the varying valuations of XAUT’s market capitalization. By March 31, 2025, XAUT’s market cap had reached $770 million. However, in another instance, the capitalization peaked at $853.7 million, likely influenced by global demand for safe-haven assets amid economic uncertainty, rising inflation, and geopolitical tensions.

This demand drove up the market price of XAUT, in contrast to the stable $1,716.53 price used in calculating the $770 million capitalization from the $1.33 billion in XAUT tokens at March 31, 2025.

The attestation from BDO Italia s.r.l., an accounting firm, is part of El Salvador’s regulatory requirement for crypto firms operating within its jurisdiction.

Paolo Ardoino, chief technology officer at Tether, said: “XAUT provides a digital and transferable form of physical gold, combining the efficiency of blockchain technology with the enduring value and stability of gold.”

He added that this unique combination has made XAUT an attractive investment vehicle for a broad range of investors.

“We are pleased to see growing adoption of XAUT, which is a testament to the increasing demand for tokenized assets that offer both familiarity and innovation,” Ardoino said.

Earlier this year, Charles Gasparino, a reporter for CNBC, raised concerns about Tether’s auditing practices. Gasparino claimed that the reports prepared by BDO Italia did not fully comply with international financial reporting standards.

However, a spokesperson for BDO Italia said that the firm’s reports were prepared in accordance with applicable legal and regulatory requirements in the country where the attestations were prepared.

In the case of El Salvador, the reports were prepared in accordance with the applicable provisions of Law No. 7245, on December 24, 1991, on the legal regime of economic and financial institutions, and its complementary regulations for the preparation of the financial statements of a credit institution.

The spokesperson said: “BDO Italia is committed to maintaining the highest standards of professional skepticism and due diligence in all of its engagements.”

Despite the varying perspectives on the comprehensiveness of the audits, the fact that Tether is providing attestations for its reserves is a step toward greater transparency.

In the past, Tether has faced criticism for a lack of transparency in disclosing its reserves and for the methods used to value them.

This lack of transparency was a key concern among members of the U.S. Congress, who raised questions about Tether’s role in the crypto ecosystem during a hearing on digital assets.

However, in response to a question from Congressman Tom Emmer, Patricia Hunter, vice president and head of legal at Circle, said that Tether had become more transparent in disclosing its reserves.

Hunter said: “I think we’ve seen a shift in the industry toward greater transparency, particularly with the introduction of new accounting standards and regulatory requirements.”

She added that Circle had always strived to maintain transparency in its operations and that its attestations were prepared in accordance with U.S. Generally Accepted Accounting Principles.

The presence of attestations for the company’s reserves and the adjustments made to meet El Salvador’s legal and regulatory requirements are part of a broader shift in the industry toward greater transparency.

This shift has been driven in part by the increasing interest of institutional investors in crypto assets and the need for these investors to be able to demonstrate compliance with their internal policies.

Moreover, as regulators around the world step up their scrutiny of the crypto industry, firms operating in multiple jurisdictions will need to ensure that their practices meet the requirements of each regulator.

In the case of Tether, the company’s actions will be subject to scrutiny by regulators in the U.S., Europe, and other major markets, as they move to put in place rules for stablecoins.

Stablecoins have become a key part of the crypto industry, facilitating trading, lending, and other DeFi activities. However, the lack of regulation in this area has raised concerns among policymakers.

A senior U.S. regulator has warned that the window of opportunity for establishing a common regulatory framework for stablecoins is closing.

Speaking at an event organized by the Center for Global Development, the president of the Commodity Futures Trading Commission (CFTC), stated that time