Anchorage Digital said Wednesday that institutional clients can now hold, trade and borrow against Tether Gold (XAU₮), the gold-backed token issued by TG Commodities S.A. de C.V. In a press release shared exclusively with Unchained, the company called it "full lifecycle support" for tokenized gold and said XAU₮ is the opener for more tokenized real-world assets (RWAs) it plans to offer through Anchorage Digital Prime, its platform for institutions.

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How It Works

Clients can keep XAU₮ at Anchorage Digital Bank, N.A., which won conditional approval for a national trust charter from the Office of the Comptroller of the Currency (OCC) in January 2021, or at Anchorage Digital Singapore, which holds a Major Payment Institution license from the Monetary Authority of Singapore. They trade it through the firm's principal desk and can post it as collateral for derivatives. In written answers to Unchained, Anchorage co-founder and CEO Nathan McCauley said the desk prices and executes orders itself instead of routing them to a venue, and that custody, trading and pledging were all live as of Nov. 11, with XAU₮ supported on Ethereum.

Clients can pledge XAU₮ held at the bank and borrow USD or USDT, Tether's dollar stablecoin, against it in arrangements with other Anchorage Digital Bank clients, the release said. McCauley told Unchained those counterparties include the Anchorage Digital Prime Financing desk, and that "the Bank is not the lender" in these arrangements; Anchorage provides custody and the infrastructure to verify the collateral. The parties set loan-to-value, rates and minimum size themselves, and Anchorage doesn't publish them, he said.

Who's Buying

Anchorage said XAU₮ is the busiest tokenized gold product on its trading desk. McCauley said the firm doesn't break out volume by asset, but that institutional activity in XAU₮ there is up more than 10x from a year ago, with clients both buying and selling. The demand, he said, comes from businesses that already deal in gold, such as precious-metals dealers and mining companies, as well as funds, trading firms and family offices.

"A year ago the question we heard was whether institutions could hold tokenized gold at all," McCauley told Unchained. Now, he said, clients want to trade it around the clock and borrow against it without giving up their gold exposure.

Ties to Tether

The launch adds to a relationship that runs through stablecoins. Anchorage Digital Bank issues USA₮, the US stablecoin Tether set up with Bo Hines as CEO, and in February Tether invested $100 million in Anchorage at a $4.2 billion valuation.