Tokenized gold is gaining traction… Tether Gold takes over half of the gold-linked stablecoin market

Amid heightened geopolitical tensions and trade uncertainty, demand for safe-haven assets is strengthening, rapidly expanding the tokenized gold market.

According to Cointelegraph on the 26th (local time), Tether said the market capitalization of its gold-linked stablecoin Tether Gold (XAUt) has surpassed $2.2 billion, accounting for more than half of the entire gold-backed stablecoin market. As of the end of the fourth quarter of last year, there were 520,089 XAUt in circulation, with each token backed 1:1 by one troy ounce of physical gold.

Paolo Ardoino, Tether’s CEO, said the amount of physical gold backing XAUt has grown to a level comparable to the gold reserves of some countries. The announcement coincided with COMEX gold prices surpassing $5,000 per ounce for the first time ever.

Behind the gold rally is a push by central banks to reduce reliance on the U.S. dollar. According to the World Gold Council (WGC), central banks purchased a net 220 tons of gold in the third quarter of last year alone. Over the same period, the U.S. Dollar Index (DXY) continued to trend lower, underscoring a clear weakening in the dollar.

Meanwhile, bitcoin (BTC) is often cited as a hedge against currency debasement, but is seen as failing to attract inflows as steady as gold. Some analysts say gold continues to serve as the preeminent safe-haven asset, particularly among conservative investors.