Gold saw a massive surge starting from late 2025 till early 2026. The yellow metal’s upswing came amid high macroeconomic uncertainties and growing global geopolitical tensions. However, investing in gold has taken different forms. The launch of gold-backed blockchain based cryptocurrencies have brought a new paradigm to the precious metal. Let’s take an explained route into the differences, pros and cons of regular gold and Tether’s gold cryptocurrency.

Gold Vs. Tether Gold Explained

While gold is a physical entity, Tether’s XAUT is a digital token backed by physical gold. Each XAUT represents a specific amount of gold stored in vaults. XAUT is an ERC-20 token, which means that it is based on the Ethereum blockchain. The price of XAUT is pegged to the price of gold, and moves in tandem.

There are advantages and disadvantages of both, physical gold and a gold-backed cryptocurrency token. Firstly, while it is difficult to transfer and transport physical gold, a digital currency is easier to send and receive. Moreover, transfer of digital assets may happen within minutes, whereas physical gold takes a much longer time.

Furthermore, storing physical gold could be more expensive, as you may have to pay for vault use. On the other hand, cryptocurrency-based digital gold can be stored in your crypto wallet.

While the advantages are many, digital gold, like Tether’s XAUT, come with some risks. If you store you digital gold on an exchange, there is a risk of it being exploited in a hack. Crypto exploits are plentiful, and it is always safer to store digital assets in a cold wallet.

Additionally, while Tether claims to have 1:1 backing for each XAUT token, the company has received flak in the past for not completely disclosing its reserves. However, recent reports show that the company holds more than $3.3 billion worth of gold as of March 31, 2026.