Tether shuts down the Alloy project and the aUSDT token: a strategic shift in the product line
On June 17, Tether announced the phased discontinuation of the Alloy platform and its key asset, aUSDT. This dollar-pegged token, overcollateralized by Tether Gold (XAUt), will no longer be available for new operations.
The first phase of the wind-down has already been initiated: immediately after the interface update, users lost the ability to open new positions and issue additional aUSDT. Existing clients have been given a three-month period to redeem aUSDT and withdraw their XAUt collateral. From September 17, those who have not repaid their obligations will not be able to retrieve their collateral directly through the platform.
Alloy by Tether was launched exactly one year ago, on June 17, 2024. The main product, aUSDT, was positioned as an overcollateralized asset: the value of the locked gold always exceeded the volume of tokens issued. The idea was to provide users with dollar liquidity without requiring them to sell tokenized gold, which was intended to attract investors seeking to maintain exposure to the precious metal.
Reasons for closure and market context
Tether explained the decision by citing a review of user activity, market demand, and strategic priorities. The company intends to focus resources on XAUt and other key ecosystem products. At the time of closure, Alloy's market capitalization was only about $1.2 million, with reserves of 14.73 kg of gold worth approximately $2.2 million. For comparison, XAUt's market value reaches $3 billion, backed by 22,169 kg of the precious metal.
According to company representatives, Alloy helped test demand for gold digital assets and collateral products, as well as understand how users interact with tokenization and real-world assets (RWA). However, judging by the low metrics, the experiment did not meet expectations.
Trend of product line reduction
This is not the first reduction in Tether's product line. In February, the company discontinued the development of the CNHT stablecoin, pegged to the Chinese yuan, citing changing market conditions and low interest. In November 2025, EURT was wound down due to regulatory requirements in Europe and a focus on the Hadron tokenization platform.
It is worth noting that in the first quarter of 2026, Tether's net profit was $1.04 billion, confirming its dominant position in the stablecoin market. The closure of Alloy is not a sign of weakness but rather a pragmatic step in a mature market where the company prefers to concentrate on the most profitable and scalable products.
My analysis: Tether's decision to wind down Alloy and aUSDT is a logical step given low liquidity and limited demand for niche products. The company is clearly betting on scaling XAUt and other areas where there is already a significant user base. For investors, this is a signal that Tether continues to optimize its portfolio, cutting off unpromising assets in favor of more sustainable ones.