- Elemental Royalty is pioneering a tokenized Gold dividend, offering investors payouts in Tether‘s XAUT token alongside traditional cash.
- Tether’s gold-backed token, XAUT, now has a market cap of $2.5 billion, having surged as the price of gold rose 66% in the past year.
- Tether’s partnership with a public royalty firm marks a major step in bringing tokenized assets into traditional corporate finance structures.
- Market makers like Wintermute are now facilitating institutional trading of tokenized gold products, forecasting the market could hit $15 billion by year-end.
In a novel move for Wall Street, Elemental Royalty announced on Tuesday that it will allow investors to receive dividends in Tether’s gold-pegged XAUT token, as stated in a company press release. This initiative aims to provide direct ownership of physical gold through digital assets, stemming from the firm’s gold royalty investments.
CEO David Cole described the decision as a forward-thinking innovation that differentiates the company. Consequently, the firm’s approach avoids mining operational risks while maintaining exposure to gold’s price upside.
Meanwhile, Tether’s venture into tokenized gold has gained significant traction. The market capitalization of XAUT has swelled to $2.5 billion from $714 million as the precious metal’s price soared.
Paolo Ardoino, Tether’s CEO, hailed this corporate adoption as a major step forward, “showing how tokenized assets can unlock new financial models that were previously out of reach,” he said in a separate press release. This follows earlier consumer-focused integrations, like its adoption by video platform Rumble for user tips.
Ardoino recently estimated the company’s physical gold holdings at around 140 tons, stored in a Swiss vault. This gold partially backs Tether’s flagship $183 billion USDT stablecoin.
The growing institutional interest is further evidenced by market makers entering the space. Last week, Wintermute began executing over-the-counter trades in XAUT and competing token PAX Gold for financial institutions.
The firm cited robust, round-the-clock demand amid global de-dollarization pressures. It forecasts the tokenized gold market could reach $15 billion by the end of the year.
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