Tether’s XAUt gold token receives Shariah certification to expand Islamic finance access
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Tether's gold-backed token, XAUt, has received Shariah certification from Amanah Advisors. This certification confirms that XAUt complies with key Islamic finance principles such as full backing by physical gold, absence of interest and leverage, and transparent reserves. Each XAUt token is backed by one troy ounce of physical gold stored in Swiss vaults, allowing Islamic financial institutions and investors requiring Shariah-compliant options to consider it as an investment.
This designation is significant because it provides Tether with a clearer pathway to market XAUt within regions where Islamic finance is prevalent, including the Gulf Cooperation Council countries, South Asia, and parts of Africa. XAUt is among the largest tokenized gold products in the crypto space, with Tether’s latest reserves report showing over 707,000 troy ounces of physical gold backing the tokens, valued at more than $3.3 billion as of March 31. Onchain asset values for XAUt reportedly rose from approximately $700 million in July 2023 to about $2.5 billion, according to RWA.xyz data.
The Shariah certification of XAUt is part of a broader trend of developing Shariah-compliant crypto products aimed at addressing concerns among Islamic scholars regarding compliance with principles that prohibit excessive uncertainty, speculation, and interest. For example, earlier crypto initiatives in the Islamic finance space include Bahrain’s AlAbraaj Restaurants Group adopting Bitcoin with intentions to create Shariah-compliant instruments and Palm Azgar Finance expanding its Shariah-compliant PUSD stablecoin to new blockchain infrastructure.
Additionally, Dubai is highlighted as a growing hub for regulated digital asset markets in the Middle East, recently issuing its 50th virtual asset service provider license and surpassing licensing numbers in Hong Kong and Singapore. This regulatory growth supports the expansion of Shariah-compliant crypto products and broader Islamic finance adoption in the region.