How safe is Tether Gold (XAUt)?

Spoiler: How safe is Tether Gold? The short answer is yes, it is relatively safe, but there are a few important catches.

@tether launched XAUt in 2020, with each token representing one troy ounce of physical gold. Current mcap exceeds $3.5B and accounts for ~47% of the entire tokenized gold sector.

How XAUt works?

XAUt is powered by @LayerZero_Core‘s OFT standard. Each token is pegged 1:1 to one troy ounce of physical gold, allowing you to hold, transfer, and trade it like any other crypto.

Is it backed by real gold, though?

Well, @tether has increased its gold holdings to 140 tons, primarily to back XAUt… In the Q4 2025, they added 27 metric tons to its reserves (you can check the report at gold.tether.to/reports).

Tether stores the gold in Swiss vaults that meet London Good Delivery standards. However, when assessing how safe is Tether Gold, investors should note that TG Commodities, the issuer of XAUt, operates under the regulatory framework of El Salvador rather than the U.S. or EU.

So… What are the catches?

1. @tether‘s gold reserves are attested by BDO, but not audited.
2. TG Commodities registered XAUt in a weaker jurisdiction rather than in the US or EU, where regulators enforce stricter consumer protection laws.
3. You’re ultimately trusting @tether here, an organization that’s mostly opaque in their operations and paid $41M in fines to US regulators for lying about their reserves.

Also… @tetherxau operates through a highly centralized infrastructure where @tether maintains direct control over every smart contract.

The can blacklist any address they want…

The company itself becomes a single point of failure for asset security. Users cannot independently verify gold holdings or enforce claims without @tether‘s cooperation.

But overall, XAUt gives you the ability to get gold exposure without KYC, with zero hassle of physical storage. For small exposures, XAUt is good. If you’re a whale… it might be better to get some physical gold. 🙂