(Kitco News) - Analysts have noted that the biggest hurdle to the adoption of tokenized gold remains trust; investors have to trust that tokens are backed by secure physical gold. The world’s biggest gold-backed token has announced a significant step toward establishing that trust.
Tether, the world’s largest digital asset firm, announced Thursday that KPMG U.S. has completed an independent audit of the financial statements of Tether Gold (XAU₮) for the year ended December 31, 2025.
“The audited statements show XAU₮ fully backed by allocated physical gold,” the company said in the report.
The digital asset company said that, as part of the audit, KPMG physically counted and inspected every individual gold bar backing XAU₮. The audit verifies the existence and identifying information of each bar rather than relying solely on custodian confirmations, the company added.
“This is another landmark for Tether’s Finance team,” said Simon McWilliams, Chief Financial Officer of Tether. “In August we completed one of the largest first-time audits ever undertaken. Today we add a second unqualified opinion, this time on a balance sheet built on physical gold. Our strategy was deliberate: start with the largest and most complex businesses, USD₮ and XAU₮, and set the standard for the industry.”
While Tether has reached a major milestone in the development of XAU₮, Tether CEO Paolo Ardoino said that this is just the beginning for digital gold.
“I firmly believe XAU₮ is on track to become the first true competitor to the gold ETF market, bringing more utility to the end user, from gold that can actually move and settle at the speed of light, to lower custody costs and higher transparency thanks to the blockchain technology. Tether proved its extremely scalable model with USD₮; now it’s time to expand it to gold,” he said.
Beyond last year’s audit, Tether Gold has seen solid growth through 2026. The company said that the amount of gold backing XAU₮ grew 59% in the first nine months of 2026, reaching 25.7 tonnes, worth $3.44 billion, at the end of September.
However, in early November, Tether published its third-quarter report, noting a decline in its physical gold reserves during the summer. Tether's disclosed total gold holdings, which include gold held in reserve for USD₮, fell by approximately three metric tonnes in the third quarter to 165 tonnes, down from 168 tonnes at the end of June. The decline followed the company's purchase of roughly 14 tonnes of gold in the second quarter.
Despite the headwinds facing the broader gold market, many analysts continue to see significant potential in the evolving digital gold marketplace.
In a report published last month, the World Gold Council (WGC) said the industry is approaching a critical turning point as digital innovation creates new opportunities to expand gold's role beyond its traditional function as a store of value.
"Our modelling suggests that if stakeholders address the principal barriers to adoption, they can boost both participation and portfolio allocations, unlocking up to $700 billion in latent demand. Fully realised, this would create a market that broadly matches physically-backed gold ETFs today," the report said.
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