Tether, the entity behind the colossal $110 billion stablecoin USDT, has unveiled a groundbreaking token minting platform named Alloy on the Ethereum blockchain, allowing users to create tokens secured by Tether’s tokenized gold (XAUT).

“Alloy by Tether is an open platform that enables the creation of collateralized synthetic digital assets and will soon be integrated into the forthcoming Tether digital assets tokenization platform, launching later this year,” declared Paolo Ardoino, CEO of Tether, in a post on X. The platform is anticipated to potentially offer yield-bearing products in the future, as per a press release from Tether.

The inaugural asset available on Alloy is aUSDT, a token whose value is pegged to the U.S. dollar. Investors can mint aUSDT by using Tether’s XAUT as collateral. With a market capitalization of $570 million, XAUT is underpinned by physical gold stored in Switzerland, according to Tether.

Read more: Tether Poised for Over $1B Investment Surge in the Upcoming Year

The aUSDT token is designed for users desiring to utilize cryptocurrency for payments and remittances without liquidating their gold-backed tokens, the press release elucidated. The positions need to be overcollateralized, implying that the amount of new tokens users can mint is capped at 75% of the collateral’s value.

The issuance of these assets will be managed by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., entities regulated under El Salvador’s National Commission of Digital Assets (CNAD).

Tether’s innovative offering comes as part of its broader strategy to diversify its services beyond the issuance of USDT, the predominant stablecoin by market value, which forms a crucial part of the digital asset ecosystem. The company has recently made investments in bitcoin mining, payment processing, and artificial intelligence through cloud computing.

In April, Ardoino also revealed plans to launch a tokenization platform aimed at facilitating the creation of digital versions of various assets, including bonds, stocks, funds, and loyalty reward points.