Tether XAUT Officially Certified as Sharia-Compliant, Digital Gold Free from Riba and Leverage

Tether XAUT and Sharia certification represent an important development in the gold-backed digital asset market. 

Amid growing interest in the tokenization of real-world assets or Real World Assets (RWA), Tether has announced that its digital gold token has obtained Sharia compliance certification from Amanah Advisors. 

This decision opens greater opportunities for investors and Islamic financial institutions to access digital gold designed in accordance with Sharia principles.

Key Takeaways

• Tether Gold (XAUT) has officially obtained Sharia certification from Amanah Advisors.
• Each XAUT token is backed by one troy ounce of physical gold stored in Swiss vaults.
• This certification has the potential to expand the adoption of digital assets in the global Islamic finance industry.

What Is Tether XAUT and Why Is It Now Sharia-Certified?

Tether Gold or XAUT is a digital asset token that represents ownership of physical gold on the blockchain. Each 1 XAUT is backed by 1 troy ounce of physical gold stored in Swiss vaults and allocated directly to the token holder.

Unlike crypto assets whose value depends on market movements, the price of XAUT follows the global gold price because each token has gold reserves as its underlying asset (underlying asset). 

This makes XAUT one of the Real World Assets (RWA) products that connect physical assets with blockchain technology.

Tether has announced that XAUT has now obtained Sharia certification from Amanah Advisors, an Islamic financial advisory firm led by Mufti Faraz Adam. 

According to reports from Crypto News and Cointelegraph, the certification states that the structure of XAUT complies with the main principles of Islamic finance.

This certification is important because it provides assurance that the product has undergone an assessment process by an independent institution that understands Sharia investment standards. As a result, XAUT has a greater opportunity to be used in various Islamic financial services. 

Source: X/@tethergold

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How Does the Structure of XAUT Comply with Sharia Principles and What Are Its Benefits?

In the assessment process, Amanah Advisors evaluated various operational aspects and the structure of XAUT to ensure its compliance with Sharia principles.

Some of the main factors that formed the basis of the certification include:

• each token represents ownership of real physical gold;
• gold reserves are available and verifiable;
• it does not contain elements of riba (interest);
• it does not use leverage mechanisms;
• it does not rely on speculative derivative contracts;
• transactions follow asset ownership provisions in Islamic finance.

These characteristics make XAUT different from various gold-based derivative instruments that only provide price exposure without direct asset ownership.

Convert 1 XAUT to IDR - Indonesian Rupiah Exchange Rate 

Transparency of gold reserves

In addition to a Sharia-compliant structure, transparency is one of the important aspects in the management of XAUT.

Tether states that all tokens are backed by physical gold stored in Swiss vaults. Token holders can also verify information regarding gold ownership through transparency reports published by the company.

This model provides confidence that circulating tokens have real supporting assets, not merely claims on the gold price.

Source: X/@tethergold

Read Also: Advantages and Risks of Buying XAUT as Crypto-Based Gold

Benefits for investors and Islamic financial institutions

Sharia certification opens opportunities for the use of XAUT by various institutions that previously had limitations in accessing digital assets.

This product has the potential to be utilized by:

• Islamic banks;
• takaful companies;
• Sharia fund managers;
• trade financing institutions;
• individual investors who prioritize compliance with Sharia principles.

According to a Cointelegraph report, the certification can expand the utilization of XAUT in the Islamic finance market, which has assets valued in the trillions of dollars.

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What Is the Impact on Crypto Adoption in the Islamic World?

The Sharia certification of XAUT has a broader meaning than merely recognition of a single product. This step shows that blockchain-based digital assets can be designed to meet Islamic finance standards without eliminating the benefits of the technology.

This development also strengthens the trend of real-world asset (RWA) tokenization that has continued to grow in recent years. While market attention was previously more focused on tokenized government bonds and money market funds, physical gold is now increasingly finding its place in the blockchain ecosystem.

For Tether, this achievement expands the business diversification of a company long known as the issuer of the USDT stablecoin. 

Meanwhile, for the crypto industry, Sharia certification has the potential to become an entry point for new investors who were previously hesitant to use digital assets due to Sharia compliance considerations.

Although certification has been obtained, investment decisions remain in the hands of each investor. They still need to understand the characteristics of XAUT, gold market risks, and ensure that the product is available through the platforms they use.

Source: X/@tethergold

Read Also: What Is Tether Gold (XAUt)? How to Buy and Stake on Bittime

Conclusion: Is XAUT Worth Considering as an Investment Option?

Tether Gold (XAUT) presents a combination of physical gold ownership and the ease of transactions through the blockchain. 

The Sharia certification from Amanah Advisors is an added value because it provides certainty that the product structure has been assessed as compliant with Islamic finance principles, including being free from elements of riba, leverage, and derivative-based speculation.

For investors seeking exposure to gold in digital form, XAUT can be an attractive alternative. 

On the other hand, this certification also has the potential to accelerate the adoption of digital assets among Islamic financial institutions and expand the development of the real-world asset tokenization sector in the future.

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FAQ

What Is Tether XAUT?

Tether XAUT or Tether Gold is a digital asset token that represents ownership of one troy ounce of physical gold stored in Swiss vaults.

What Is the Sharia Certificate from Amanah Advisors?

The Sharia certificate is an independent assessment stating that the structure of XAUT has met the main principles of Islamic finance.

Why Does XAUT Need Sharia Certification?

The certification provides assurance for investors and Islamic financial institutions that the product meets investment standards in accordance with Sharia principles.

Does XAUT Contain Riba or Leverage?

Based on the assessment results from Amanah Advisors, XAUT does not contain elements of riba or leverage mechanisms in its structure.

How Transparent Are XAUT’s Gold Reserves?

Tether states that each token is backed by physical gold stored in Swiss vaults and can be verified through the company’s transparency reports.

Is XAUT Now Available for Sharia Investors?

Sharia certification opens opportunities for investors and Islamic financial institutions to use XAUT. However, its availability still depends on trading platforms and regulations in each region.