Tether’s Gold-Backed Token XAUT Gains Shariah Compliance Certification
RWA Signal Insight
CommoditiesTether has officially secured Shariah compliance certification for its gold-backed digital token, XAUT, from the advisory firm Amanah Advisors. This certification confirms that the token adheres to Islamic finance principles by prohibiting interest, excessive uncertainty, and speculation. Each XAUT token represents one fine troy ounce of physical gold stored in Swiss vaults, ensuring the asset remains tangible and compliant with religious standards. By meeting these requirements, XAUT is now positioned as a permissible investment for Muslim investors and institutions globally. This development is significant for the RWA market as it bridges the gap between blockchain-based digital assets and the $4 trillion Islamic finance industry. The move could accelerate the adoption of tokenized precious metals in key markets such as the UAE, Saudi Arabia, Malaysia, and Indonesia. Furthermore, this certification sets a precedent for other digital asset issuers looking to align their products with ethical and legal frameworks in diverse financial sectors.
Key points
- Amanah Advisors certified Tether's XAUT as Shariah-compliant for Muslim investors.
- XAUT represents one fine troy ounce of physical gold stored in Switzerland.
- Certification targets the $4 trillion global Islamic finance market for digital gold.
- The token operates on multiple blockchains including Ethereum and Tron.
Background
Tether's XAUT is a stablecoin-like asset launched in 2020 that provides digital exposure to physical gold bullion. It functions by tokenizing ownership of gold stored in secure Swiss vaults, with each token pegged to the market price of one troy ounce of gold. The protocol undergoes regular audits to verify that the physical reserves match the circulating supply of tokens.