Tether’s gold-backed stablecoin XAUT has recieved its Shariah Certification, said an official announcement on Monday. UK-based Islamic finance advisory firm conducted an audit and a structural compliance analysis of XAUT following which the stablecoin was issued its Shahria compliance certificate. This certificate will widen Tether’s expansion plans for the Middle Eastern markets.
When a product is Shariah compliant, it is recognized to be in alignment with Islamic law. These products, investments, or transactions avoid interests and excessive uncertainty while also not being linked to ethical prohibitions like gambling.
The XAUT stablecoin, coined by Tether, is pegged to physical gold. Each token of the XAUT is backed by one troy ounce of real gold, which Tether has been accumulating in a Swiss vault facility.
To clear its Shariah certification, the American stablecoin company had to prove that its token does ensure ownership of real gold with a verifiable asset backing. Tether also had to show that investing in XAUT does not entail any sort of an interest collection.
Announcing the development Tether said, “Islamic finance represents one of the fastest-growing segments of global finance, while gold remains a cornerstone asset across many Muslim-majority markets. The certification of XAU₮ opens new opportunities for Islamic banks integrating digital gold offerings.”
Tether, for a while now, has been making quick moves to establish its prominence in countries like the UAE, Turkey, Saudi Arabia, Kuwait, Bahrain, and Qatar.
In the UAE, for instance, the USDT stablecoin is recognized as an Approved Fiat Reference Token. The XAUT was also recently named as an Accepted Spot Commodity.
In Turkey, Tether has signed an MoU with Turkish strategy/tech firm BTguru to integrate digital asset business lines directly into national banks. Meanwhile in the Saudi and Kuwait region the company is pushing for deeper USDT adoption for peer-to-peer payments and low-cost cross-border remittances through its partnership with Kem, a Middle Eastern financial app.
Now that XAUT is Shariah-certified, Tether is looking to bring the token to the table for halal savings products, long-term wealth preservation strategies, tokenized trade finance and collateral applications. The broader goal is to cater to Islamic institutional investors seeking compliant exposure to gold markets.
“We are expanding access to digital gold in a way that respects Islamic finance principles while leveraging the transparency and efficiency of blockchain technology,” said Tether CEO, Paolo Ardoino, as commenting on the development.
Amanah Advisors will be working with Tether to help it design its adoption strategies in the Shariah-required markets.
At the time of writing, the XAUT stablecoin was trading at $4,078, data by CoinMarketCap showed. Its total market cap stood at $2.49 billion with over 63,200 holders.
Source: CoinMarketCap
Meanwhile, Tether’s market rival Circle which issues the USDC stablecoin has not officially pursued or acquired a corporate Shariah certification for USDC.
