Tether issues stable gold coin and has launched Bitfinex

The stablecoin company Tether today launched Tether Gold, a stablecoin that anchors physical gold. It can be used as an ERC-20 token on the Ethereum blockchain, or as a TRC20 token on the TRON blockchain. The stablecoin has been launched on Tether's sister company, Bitfinex. The minimum purchase price is around $ 75,000.

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Tether stated that owning a Tether Gold token XAU ₮ is equivalent to owning one ounce of physical gold in the London gold market. The owner of this gold is TG Commodities Limited, a company registered in the UK specializing in precious metals and partly owned by Parduman K Gupta. According to Forbes, the Gupta family is one of Britain's largest private landowners.

Tether said it "directly controls the storage of physical gold," which is stored in a vault in Switzerland. Search for the Ethereum address of the token on its website to identify the gold bar represented by the ERC-20 token. However, according to the terms of the site, the custodian does not have to insure the entire gold reserve, which means that if the company goes bankrupt, the custodian does not have to pay the client.

Tether is a controversial company because it insists that its stablecoin is linked to its reserve funds one-on-one. In October 2018, Tether claimed that its stablecoin anchored in the U.S. dollar was "fully supported" by the U.S. dollar cash equivalent, but later dropped that claim; Tether later claimed that "74%" of their funds were backed by the U.S. dollar of.

Bitfinex and Tether are also under investigation by the New York Attorney General's Office (NYAG). NYAG said Bitfinex used Tether to provide loans to itself to cover its $ 850 million financial loophole.

"Step by step," NYAG wrote, these companies "eliminated cash-backed Tether: First, from an inaccessible Crypto Capital account, the actual cash on hand increased to $ 625 million; then it was opened with Bitfinex $ 625 million IOU to replace this questionable source of support. "

However, Tether assured investors on its website that its new gold token is backed by real gold. What do you think of Tether's issuance of gold stablecoin this time?