Tether is winding down its Alloy project and aUSDT token, allowing users three months to redeem their assets before losing access.
Tether has announced the gradual shutdown of its Alloy project and the associated aUSDT token, which is backed by Tether Gold (XAUt). This decision was revealed on June 17, with the first phase already underway.
As part of this initial phase, users can no longer create new positions or issue additional aUSDT tokens following an interface update. Current holders have a three-month window to redeem their aUSDT tokens and withdraw their collateral in XAUt. After September 17, any unredeemed aUSDT will mean users forfeit their ability to retrieve collateral directly from the platform.
Launched on June 17, 2024, Alloy aimed to maintain over-collateralization, ensuring the value of the gold backing exceeded that of the issued assets. This was designed to facilitate dollar liquidity without the need to liquidate tokenized gold.
Tether attributed the project’s closure to a reassessment of user engagement, market needs, and the company's strategic direction, with a shift in focus towards XAUt and other primary offerings.
Alloy had an estimated market cap of around $1.2 million and held reserves of 14.73 kg of gold, worth approximately $2.2 million. In contrast, the market capitalization of XAUt is approximately $3 billion, with collateral of 22,169 kg of gold.
Company representatives noted that Alloy served as a valuable tool for assessing demand for gold-backed digital assets and understanding user interaction with tokenization and real-world assets (RWA).
This marks another product line reduction for Tether, which previously halted the development of the CNHT stablecoin in February, citing low market interest and changing conditions. In November 2025, Tether also discontinued EURT due to regulatory challenges in Europe and a strategic pivot towards the Hadron tokenization platform.
In related news, Tether reported a net profit of $1.04 billion for Q1 2026.
