Tether shuts down Alloy and aUSDT, keeps XAUT as gold-backed liquidity plan
Tether is winding down Alloy, the product that let users deposit XAUT (Tether Gold) as collateral on Ethereum smart contracts to mint the gold-backed derivative stablecoin aUSDT. The shutdown starts immediately: Tether will stop opening new positions and block new aUSDT minting.
Existing users can return (redeem) aUSDT for XAUT until Sept. 17, 2026. After that deadline, users that haven’t returned aUSDT will no longer be able to recover XAUT via the Alloy platform.
Tether says this is not an exit from tokenized gold. XAUT remains active and is positioned as a core product, with roughly $3B market value backed by 22,000+ kg of physical gold. Tether also cites Alloy’s small scale (about $1.2M aUSDT market cap; ~14.73 kg gold backing worth about $2.2M) versus XAUT’s much larger footprint.
The decision continues Tether’s broader product tightening, including prior stablecoin support cuts (CNHT and EURT). For traders, the key watchpoints are aUSDT liquidity/contract risk before the redemption deadline, and any flow shifts between aUSDT demand and XAUT as the gold token retains the main exposure route.
Neutral
Alloy’s shutdown is bearish for aUSDT holders in the short term because new issuance stops and liquidity can tighten as the Sept. 17, 2026 redemption window approaches. However, the move is neutral-to-limited for the broader tokenization theme because Tether keeps XAUT active as the main gold exposure route and explicitly allows users to redeem aUSDT back into XAUT during a defined period. Any market impact is therefore more about shifting positions from aUSDT to XAUT rather than a full removal of tokenized gold risk, which dampens systemic price damage.