Tether Debuts Gold-Backed Stablecoin XAUT on Arbitrum, Expanding Its Interoperability Solution

Tether, the provider of the XAUt0 gold stablecoin, announced a strategic collaboration with Arbitrum, a Layer-2 scaling solution. The partnership enabled the integration of XAUt0 into Arbitrum’s rapidly growing chain to widen the usability of XAUt0 for DeFi utilities, derivatives, staking, and lending solutions.

Tether, which is best recognized for its prominent USDT stable asset, expanded its offerings by launching Tether Gold (XAUt0), a stablecoin backed by physical gold, in 2020. Tether also operates a cross-chain stablecoin commonly known as USDT0.

Advancing XAUt0’s Market Accessibility

The partnership facilitated Arbitrum to upgrade to the USDT0 standard, a cross-chain interoperability solution that enables movements of Tether’s USDT and XAUt0 across numerous chains using LayerZero’s OFT (Omni-chain Fungible Token) standard.

The reason for Tether integrating XAUt0 into the Arbitrum network is to make the digital gold to become a global token used across the world through the expansion of the asset’s presence on multiple blockchains. The integration marked another achievement for XAUt0 as Arbitrum becomes its fourth supporting blockchain, following Polygon, Hyperliquid, and TON.

Powered by LayerZero’s OFT infrastructure, XAUt0’s interoperability began on June 2, 2025, following its integration in the TON blockchain. Taking advantage of the large customer base on the TON ecosystem integrated with the Telegram social media platform, the launch allows people to use XAUt0 for various DeFi applications.

XAUt0 expanded its reach on Hyperliquid’s HyperEVM on June 12, 2025, allowing users to directly access the digital gold as an RWA asset for DeFi strategies, collateral, and portfolio diversification. Later on August 27, XAUt0 broadened its presence in the Polygon blockchain for deeper liquidity.

Developed on LayerZero’s OFT standard, XAUt0 can move across multiple blockchains without relying on third-party wrappers for bridges.

Tokenized Gold Market’s Meteoric Rise

The timing of the above integrations comes as the tokenized gold market continues to witness significant growth. The wider gold-backed tokens reached a new ATH of $2.88 billion in market cap this week, Monday, September 29, 2025, indicating increased customer demand.

According to on-chain metrics, Tether’s XAUt0 is the world’s largest gold stablecoin by market valuation, currently controlling a market cap of $1.44 billion. Its close rival is Paxos’s PAXG, which holds a market capitalization of $1.14 billion. The third player – Kinesis gold (KAU) – comes at a distant, with a $176.59 million market cap.