Tether Gold (XAUT) surges 18.2% YTD amid legislative push for USD-backed stablecoins, while BRICS tests gold-pegged payment systems and IMF warns of monetary fragmentation risks.
XAUT stablecoin reached $2,487 on 22 July 2024 as House-approved GENIUS Act mandates USD reserves, sparking debates over monetary sovereignty ahead of critical Senate review.
Stablecoin Showdown Intensifies
The cryptocurrency market is witnessing unprecedented volatility in gold-pegged assets as Tether Gold (XAUT) recorded $15 million in daily trading volume on 22 July 2024 – its highest since March 2023 according to CoinGecko data. This 40% weekly volume surge coincides with Argentina’s peso plummeting to 1,450 per dollar, driving retail investors toward inflation-resistant alternatives.
Legislative Counterstrike
The GENIUS Act cleared the House on 18 July 2024 with a 217-195 vote, requiring stablecoin issuers to maintain 100% USD reserves. C-SPAN archives reveal heated debates where Rep. Maxine Waters (D-CA) warned the bill ‘handcuffs innovation,’ while sponsor Sen. Tom Emmer (R-MN) argued it prevents ‘monetary anarchy.’
BRICS’ Golden Gambit
A BRICS technical working group confirmed on 19 July 2024 through Reuters that member states are testing a blockchain-based gold settlement mechanism. This follows the World Gold Council’s report of 22% YoY growth in tokenized gold demand, primarily from Asian institutional investors.
IMF Sounds Alarm
The International Monetary Fund’s 20 July 2024 stability report (Annex 4.2) calculated that widespread gold-backed crypto adoption could reduce IMF leverage in debt crises by 30%. Deputy Managing Director Gita Gopinath stated: ‘These instruments complicate multilateral resolution mechanisms while offering no lender-of-last-resort protections.’
Historical Precedents
The current gold tokenization wave echoes 2020’s surge in digital gold products when PAXOS Gold (PAXG) attracted $1 billion AUM within 18 months of launch. However, that initiative primarily involved retail investors rather than nation-states. Similarly, Bitcoin’s 2017 bull run saw prices collapse 80% post-peak, a pattern regulators fear could repeat with sovereign-backed crypto assets. What distinguishes today’s movement is the involvement of central banks – Turkey and Egypt reportedly trialed XAUT for cross-border settlements in Q2 2024 according to Chainalysis data. This institutional adoption creates new challenges for dollar-centric frameworks like the GENIUS Act, as national treasuries bypass commercial stablecoin issuers entirely.
