Tether is winding down the Alloy project and the aUSDT token: a strategic reassessment of priorities
On June 17, Tether announced the phased discontinuation of the Alloy by Tether platform and its key product, the aUSDT token. This asset was a dollar-denominated instrument overcollateralized by Tether Gold (XAUt). The decision was made as part of a strategic review of the company's priorities.
The first phase of the shutdown began immediately: after an interface update, users lost the ability to open new positions and issue aUSDT. Existing clients have been given a three-month period to redeem aUSDT and withdraw their XAUt collateral. Starting September 17, those who do not return aUSDT will lose the ability to retrieve their collateral directly through the platform.
Alloy by Tether was launched exactly one year ago — on June 17, 2024. The core idea behind aUSDT was to create a gold-backed instrument: the value of the locked precious metal always exceeded the volume of issued tokens. This allowed users to obtain dollar liquidity without needing to sell their tokenized gold.
Tether explained the closure by citing a review of user activity, market demand, and internal priorities. The company intends to focus resources on developing XAUt and other key ecosystem products.
The market capitalization of Alloy by Tether was estimated at approximately $1.2 million, with gold reserves of 14.73 kg worth about $2.2 million. For comparison, the market value of XAUt exceeds $3 billion, backed by 22,169 kg of precious metal. The difference is enormous, and it explains the logic behind the decision.
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 (RWAs).
This is not the first reduction in Tether's product line. In February, the company discontinued development of the CNHT stablecoin pegged to the Chinese yuan, citing low interest and limited demand. In November 2025, EURT was wound down due to regulatory conditions in Europe and a focus on the Hadron tokenization platform.
As a reminder, based on the results of the first quarter of 2026, the stablecoin issuer's net profit amounted to $1.04 billion. This confirms that Tether is confidently consolidating resources around the most promising areas.
My analysis: Tether's decision demonstrates a pragmatic approach to managing its product portfolio. Alloy failed to attract a significant audience — a market cap of $1.2 million compared to billions in XAUt speaks for itself. The company is clearly betting on scaling successful products rather than spreading resources thin. For the market, this is a signal: tokenized gold remains a priority, while experimental niche tools will be cut without regret.