Stablecoin giant Tether has introduced a new unit of account for its gold-backed cryptocurrency Tether Gold (XAUT), called Scudo, that is aimed at making gold easier to price, transfer, use as a medium of exchange, and settle across borders.
The development comes as bullion prices climbed to historic highs, and interest in digital alternatives to the precious metal continues to rise.
Tether Introduces ‘Scudo’ to Fractionalize Gold Token XAUT
XAUT is a digital token issued by Tether that represents fractional ownership of physical gold stored in secured Swiss vaults. The token can be transferred to any blockchain address and redeemed for actual gold bullion.
Meanwhile, each unit of Scudo represents one-thousandth of a troy ounce of gold. This fractional denomination, designed specifically for XAUT, allows users to transfer gold in whole or partial Scudo units via smart contracts. Tether claims this structure is easier to work with in practice as it enables precise transactions and microtransactions, rather than just long-term storage.
It mirrors Bitcoin’s use of Satoshis (SAT), named in honor of its pseudonymous founder, Satoshi Nakamoto, which allows users to transact in smaller units of a bitcoin. SAT is the smallest unit of Bitcoin, equivalent to one hundred millionth of a single coin.
Scudo does not alter how Tether Gold is issued or backed; instead, it introduces a much simpler way to measure and transfer the gold-backed token as prices rise, particularly for smaller transactions where fractional ounces become unwieldy. The company clarified that its goal is to reduce the friction often associated with pricing assets in small decimal fractions of an ounce.
While XAUT is a tokenized version of physical gold, its everyday usage has been limited by unintuitive denominations. With Scudo, the Tether USD (USDT) issuer attempts to solve that bottleneck by allowing users to transact in whole or partial units of gold that are much easier to understand. This update does not affect Tether Gold’s underlying structure, with the token remaining fully backed by physical gold held in secure vaults, with ownership verifiable on-chain using the company’s reporting tools.
There won’t be any new recurring fees tied to the new unit, as XAUT will carry its standard issuance and redemption costs, with no ongoing custodial charges. Scudo will remain a purely denomination layer, and not a new token or product.
The development also aligns with Tether’s move toward strengthening its self-custody tools. The company’s recently launched Wallet Development Kit allows developers and businesses to build wallets that support its flagship products – USDT and XAUT – alongside other digital assets.
Gold Posts Best Annual Gain Since 1979 as XAUT Market Cap Reaches $2.3B
Scudo’s launch follows a strong year for gold relative to other major assets, including Bitcoin. The precious metal surged to record highs in 2025, outperforming both equities and crypto markets, peaking above $4,550 in late December to register its best yearly performance since 1979. This was driven by inflation concerns, central bank accumulation, and rising demand for safe-haven assets.
At the time of writing, gold is trading at $4,454 per troy ounce. This would mean that at current prices, a Scudo would be valued at approximately $4.45 when rounded to the nearest dollar cent. The surge in gold’s price is also reflected in XAUT, with its market capitalization doubling in late 2025 to roughly $2.3 billion. It is the largest gold-backed token by supply, with its closest rival, PAXG, issued by Paxos, trailing with a market capitalization of about $1.68 billion.
