Tether Unveils New Version of Itself Backed By Gold

Live Bitcoin News
Live Bitcoin News January 28, 2020
Updated 2020/01/29 at 12:00 AM
4 Min Read

Tether and Gold: A Solid Match?

The coin is backed by physical gold, and thus qualifies as a stable currency in that it is tied to something that’s known to retain its value during times of economic strife. The same goes for the “classic” or standard form of Tether, which is allegedly backed by reserves of the U.S. dollar.

In addition, Tether’s new partnership with Ethereum clearly shows that despite the lack of scalability that has emerged in the Ethereum ecosystem over the past year or so – which according to co-founder Vitalik Buterin has led to several problems including high gas fees and slow transaction times – it remains one of the most popular technological platforms to build new applications and tokens.

The currency will be available as an ERC-20 token through Ethereum and as a TRC-20 token through TRON’s blockchain. Each unit of the coin will represent approximately one ounce of gold. According to a press release, the currency will feature zero-fee trading, and users who purchase the token will also garner full control over the gold stored away in Switzerland that’s backing the currency.

What’s special about stable currencies is that while they are indeed examples of digital tokens like bitcoin (BTC), bitcoin cash (BCH) and Litecoin (LTC), they are typically tied to fiat currencies or assets like the euro, the yen, the yuan or precious metals as a means of keeping them “stable” in the digital economy. In other words, having them tied to stable money allows them to retain their values.

Thus, while other forms of crypto are heavily vulnerable to volatility and price swings, stable currencies are not, and give investors an opportunity to enter the crypto trading arena while experiencing far less risk.

What’s also interesting is the notion that it will be backed by gold. Typically, gold and crypto are the subjects of many hot debates between crypto traders and standard traders. For example, the Winklevoss Twins of the Gemini Exchange in New York have commented that Wall Street players need to forget about gold and invest in bitcoin, whereas billion Ray Dalio says otherwise.

Either way, bitcoin has sometimes garnered a reputation as being “digital gold,” in that it can help a person retain wealth during the fall of their country’s economic infrastructure.

People Want This More and More

Paolo Ardoino – chief technical officer at Tether – explained in a statement:

There is a growing demand for digital exposure to physical gold, making the launch of Tether Gold a timely innovation in the crypto ecosystem… Tether Gold provides the combined benefits of both physical and digital assets, removing the drawbacks of holding gold in more traditional ways such as high storage fees.

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