Tether Launches ‘Scudo’ Gold Unit to Boost XAUT Payments

Tether’s introduction of the term ‘Scudo’ marks a deliberate effort to make gold more accessible for everyday payments. By defining one Scudo as one-thousandth of a troy ounce of gold—valued at roughly $4.48—the company aims to create a familiar, smaller denomination, similar to how ‘satoshi’ functions for Bitcoin. This parallels Tether’s broader argument that gold should be restored as a universally accepted medium of exchange, one that cannot be devalued by government monetary policy. The choice of name carries historical weight, dating back to 16th-century Italian coins, a nod to the heritage of Tether’s Italian-born CEO Paolo Ardoino and CFO Giancarlo Devasini.

The primary vehicle for this strategy is Tether’s XAUT token, which is directly pegged to physical gold and equivalent to one Scudo. According to data from CoinGecko, XAUT’s market capitalization has nearly quadrupled over the past year to $2.3 billion, signaling significant market uptake. Tether attributes this demand to persistent inflation concerns, interest-rate volatility, record central bank gold purchases, and a global search for safe-haven assets. The company has also emphasized that its wallet developer kit can support XAUT on virtually any device, aiming to integrate digital gold seamlessly into the payment ecosystem.

Tether’s ambitions are underpinned by substantial physical reserves. The company reports holding 116 tonnes of gold, valued at nearly $17 billion as of the end of Q3 2025. This dwarfs the $2.3 billion market cap of XAUT, which is specifically backed by 1,329 gold bars (16.2 metric tons) stored in secure vaults in Switzerland. Tether’s website states it can deliver physical gold bars to any address in Switzerland for token redemption, reinforcing the tangible asset backing.

Beyond XAUT, Tether has developed the Alloy token, a ‘Tethered Asset’ that allows customers to pledge XAUT as collateral to mint aUSDT tokens. These aUSDT tokens mirror the functionality of Tether’s flagship $187 billion USDT stablecoin but are pegged to the U.S. Dollar, creating a synthetic financial product layered atop its gold reserves. However, Tether continues to face scrutiny over its audit practices. Its first attestation report for XAUT, conducted by BDO Italia last April, did not comply with international financial reporting standards, lacking primary disclosures. Critics have called for independent audits for a decade, a point of contention as the firm expands its asset-backed offerings.

Tether is not alone in the digital gold arena. Its main competitor, Paxos, offers the PAXG token, which debuted just before XAUT. According to CoinGecko, PAXG’s market cap has tripled over the past year to $1.7 billion. A key differentiator is regulatory status. Paxos, which also issues PayPal’s PYUSD stablecoin, recently announced that PAXG would become ‘the only institutional-grade gold token issued under federal regulatory oversight.’ This followed the Office of the Comptroller of the Currency’s approval of a national banking charter for Paxos last month.

This regulatory gap highlights divergent paths in the stablecoin sector. While Tether’s XAUT operates with substantial reserves and growing traction—particularly in emerging markets, as noted by CEO Ardoino—it lacks the formal federal oversight that Paxos now claims. The competition underscores a broader battle for legitimacy and trust in crypto-backed assets. Tether’s recent forays, such as acquiring a minority stake in Italy’s famed Juventus football club, also reflect its strategy to build brand equity and mainstream recognition beyond its core financial products.