Tether is expanding the use of its gold-backed token, Tether Gold (XAU₮), through a new partnership with crypto lending platform Ledn.
The move will allow users to hold and trade XAU₮ on Ledn immediately, while gold-backed loans are expected to launch later this year.
Tether Gold is a digital asset backed by physical gold, with each XAU₮ token representing one fine troy ounce of gold stored in secure vaults in Switzerland. The token is designed to give investors exposure to gold while allowing them to use blockchain technology for transfers and trading.
Ledn says the new feature will eventually allow users to borrow against their XAU₮ holdings without having to sell their gold-backed assets. This works similarly to Bitcoin-backed loans, where users can access cash or stablecoins while keeping ownership of the underlying asset.
The company believes there is growing demand for financial products that give investors both flexibility and long-term ownership of valuable assets.
Unlike some lending platforms that failed during the crypto market downturn in 2022, Ledn says customer collateral will remain fully backed on a one-to-one basis and will not be lent out or used to generate additional yield.
Tether Gold has seen significant growth over the past year as interest in tokenized gold continues to increase. According to Tether, XAU₮ reserves reached more than 707,000 fine troy ounces by the end of March 2026, up substantially from the previous year.
The value of XAU₮ also grew sharply, rising from approximately $2.25 billion at the end of 2025 to more than $3.3 billion during the first quarter of 2026.
The expansion is part of Tether’s broader strategy to build more use cases for tokenized gold. Recently, the company has placed greater focus on XAU₮ while scaling back support for some other products.
The concept of using gold as collateral is not new. Traditional banks and financial institutions have used physical gold to secure loans for decades. Tether and Ledn are now bringing a similar model to the digital asset world.
Under this system, investors could use XAU₮ as collateral to borrow stablecoins while continuing to benefit from any increase in the price of gold. This may appeal to users who want liquidity but do not want to sell their gold holdings.
The partnership also helps transform XAU₮ from a simple investment asset into a financial tool that can be used within the broader crypto lending ecosystem.
Tether has been actively exploring new ways to expand the usefulness of tokenized gold. Earlier this year, the company partnered with Fasset to launch a Visa card that offers cashback rewards in XAU₮, allowing users to earn tokenized gold through everyday spending.
Beyond gold and stablecoins, Tether has also expanded into several other sectors, including Bitcoin mining, renewable energy, artificial intelligence infrastructure, and technology investments.
For Tether, the partnership with Ledn represents another step toward making tokenized gold more practical and accessible. If the planned lending services launch successfully, XAU₮ holders will be able to unlock liquidity from their gold-backed assets without giving up ownership of the underlying bullion.
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