Key Takeaways:
- XAU₮ has been officially certified as Sharia Compliant by Amanah Advisors, the gold backed token of Tether.
- Approvals for Islamic banks, institutions and investors to access compliant digital gold.
- XAU₮ is built on a blockchain and backed by 100% physical gold held in Swiss vaults.
Tether has once again made a move towards the development of real-world asset-backed tokens with XAU₮, its gold-backed, officially Sharia-compliant digital asset. With the milestone bringing the token to a market that is one of the fastest-growing in the financial world, it also guarantees physical gold backing.
Tether Secures Shariah Certification for XAU₮
Tether has said that XAU₮ has become a Sharia-compliant asset, having been certified by Amanah Advisors, headed by Mufti Faraz Adam, an Islamic finance advisory firm. It validates the token’s adherence to Islamic financial principles, which enables Muslims to achieve a digital exposure to physical gold without breaking Shariah rules.
Every XAU₮ token is representative of 1 troy ounce of actual gold preserved in secure vaults in Switzerland. Unlike the synthetic product, the token is supported by allocated bullion with serial numbers which can be exchanged for bullion gold when specified in the terms laid down by the platform.
The certification confirms multiple important aspects of Tether’s operations, including actual ownership of physical gold, the transparency of reserves, that there is no interest-based structure (riba) and that there are no interest-based operations or speculative derivatives.
Read More: Tether Powers Georgia’s Official GEL₮ National Crypto Launch
Expanding Digital Gold Across Islamic Finance
While Islamic finance is a multi-trillion dollar industry, few blockchain products have fully met the code and ethics for Islamic finance. That’s what Tether is looking to achieve with its Shariah certification, and to increase the use of blockchain in traditional finance.
New Opportunities for Banks and Institutions
XAU₮ will be able to facilitate various institutional applications of Islamic Banking, Islamic savings, takaful insurance, collateral management, tokenised trade financing and long term wealth preservation strategies.
Whereas XAU₮ will offer a proxy of the gold blockchain, it will not create indirect exposure to the gold asset. This is a practice involving the use of digital assets combined with one of the oldest forms of value-storing assets in human history.
Tether also confirmed that Amanah Advisors will continue working with the company to develop governance standards and practical guidelines supporting broader adoption, including secondary market transactions.
Read More: Tether Open-Sources Bitcoin Mining OS, Targeting Home Rigs to Global Industrial Farms
Blockchain Meets a Growing Global Market
Tether says certification will help advance XAU₮ adoption within the Gulf Cooperation Council (GCC), South Asia, and other parts of Africa and financial centers that are proactive in Islamic finance.
The expansion is also symbolic of the wider tokenisation of real world assets. Financial institutions are becoming more keen on the blockchain infrastructure, and due to the provision of transparency, faster settlement cycles, and access across every global market, tokenized commodity assets like gold are being considered.
The post Tether’s $3.3B Gold Token Wins Shariah Approval, Opening Islamic Finance to XAU₮ Worldwide appeared first on CryptoNinjas.
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