Tether Creates Tiny Gold Unit as Onchain Demand Grows

Tether has introduced a new unit of account for its digital gold token, XAUT, called Scudo. The unit represents one-thousandth of a troy ounce of gold, making it easier for users to trade and store small amounts of tokenized gold. This move follows a year of strong demand for gold-backed tokens, as investors seek diversification and safe-haven assets according to market analysis.

The introduction of Scudo is part of Tether's broader strategy to make gold more accessible on digital platforms. By dividing XAUT into smaller units, the company hopes to simplify onchain transactions and encourage broader adoption among retail and institutional users. Tether CEO Paolo Ardoino has described Scudo as similar to Bitcoin's satoshis.

Gold prices surged in 2025, reaching record levels as investors sought protection against inflation and geopolitical uncertainty. Central banks and institutional investors have been major buyers, driving demand for both physical and tokenized gold. Tether's move reflects an effort to capitalize on this growing interest while making onchain gold more usable for everyday transactions.

Why Did This Happen?

Tether's decision to introduce Scudo is driven by rising onchain demand for gold. Gold's traditional barriers—storage, custody, and divisibility—have limited its accessibility for smaller investors. Tokenizing gold with XAUT was a step forward, but further subdivisions were needed for practical use in everyday transactions.

Scudo addresses these challenges by enabling precise, fractional gold transactions. It allows users to denominate transfers in whole or partial Scudo units rather than dealing with small decimal fractions of an ounce. This change is intended to mirror how Bitcoin users transact in satoshis.

How Did Markets React?

Tether Gold (XAUT) has seen strong performance, with its market capitalization nearing $2.3 billion. The tokenized gold market as a whole has grown to around $4.3 billion, driven by increased adoption and interest from both retail and institutional investors.

The introduction of Scudo has been well-received by analysts. It is seen as a way to bridge the gap between physical gold and digital finance, making gold-backed tokens more practical for a broader audience. Some industry observers note that Scudo could help expand XAUT's use cases beyond long-term storage and into everyday digital transactions.

What Are Analysts Watching Next?

Analysts are closely monitoring how Scudo impacts XAUT's adoption and usability. The unit's success will depend on how well it integrates into existing platforms and whether users adopt it for real-world transactions.

Institutional demand for gold is expected to remain strong in 2026, particularly as geopolitical tensions and inflation concerns persist. Tether's ability to scale Scudo and maintain XAUT's market position will be key factors in determining its long-term success.

The broader tokenized gold market is also under scrutiny. With XAUT leading the sector, Tether's innovations could set a precedent for other tokenized commodities. Analysts are watching how competitors respond and whether Scudo-style units become a standard in the industry.

As the onchain economy continues to evolve, the role of tokenized gold may expand beyond its current function as a store of value. Scudo's introduction is one step in a larger trend of making physical assets more accessible and usable in digital ecosystems.