Tether Releases Scudo, Sending Gold On-Chain Now Easy

Tether Introduces Scudo as Gold Hits Record Highs, Raising Questions About Competition With New York-Approved Pax Gold

As global gold prices surge to record levels and investors increasingly seek protection from inflation and economic uncertainty, Tether has unveiled a new initiative aimed at making gold easier to use on the blockchain. On January 6, 2025, Tether announced the launch of Scudo, a new unit of account for its gold-backed token, Tether Gold (XAU₮).

The move is designed to simplify how digital gold is priced, transferred, and used for on-chain payments. While Scudo does not introduce a new token, it represents a strategic shift in how Tether envisions gold functioning in everyday digital transactions. The announcement has also sparked renewed discussion about how Tether’s approach compares with regulated competitors such as Pax Gold, a New York-approved gold-backed asset.

Source: TetherOfficial Release

According to reporting reviewed by hokanews, Tether’s timing reflects both rising demand for safe-haven assets and a broader effort to modernize gold’s role in a digital financial system.

What Is Scudo and How Does It Work?

Scudo is not a standalone cryptocurrency and does not alter the underlying structure of Tether Gold. Instead, it serves as a new unit of measurement for XAU₮ holdings. One Scudo represents one-thousandth of a troy ounce of gold, equivalent to 0.001 XAU₮. At current market prices, that amount corresponds to roughly $4.50 worth of gold.

The concept addresses a practical challenge that has grown more pronounced as gold prices climb. When assets become more valuable, everyday transactions require increasingly small fractional amounts. Using values such as 0.023456 XAU₮ can feel unintuitive and cumbersome, particularly for users unfamiliar with precise decimal-based pricing.

By introducing Scudo, Tether aims to replace long decimal figures with cleaner, easier-to-read units. The approach mirrors how Bitcoin users often reference “satoshis” instead of fractions of a full BTC. In this sense, Scudo is designed to make digital gold more approachable without altering its economic fundamentals.

What Does Not Change With Scudo

Despite the new unit of account, Tether has emphasized that nothing about XAU₮’s backing or settlement mechanics has changed. Each XAU₮ token remains fully backed on a one-to-one basis by physical gold bars stored in secure vaults in Switzerland. Ownership and reserves continue to be verifiable on-chain through Tether’s asset-tracking tools.

Transactions will still settle in XAU₮ at the protocol level. Scudo functions purely as a display and accounting layer. Over time, wallets and interfaces may show balances in Scudo rather than fractional XAU₮. For example, a wallet balance previously displayed as 0.500000 XAU₮ could appear as 500 Scudo.

This separation allows Tether to improve usability while preserving the trust model that underpins its gold-backed product.

Why Tether Is Acting Now

Gold has experienced a significant rally over the past year, rising by roughly 67 percent amid persistent inflation, geopolitical tensions, and uncertainty around interest rate policy. Central banks have also accelerated gold purchases, reinforcing its role as a reserve asset in an era of expanding sovereign debt and currency debasement.

Source: Trading Economics

These macroeconomic conditions have revived interest in gold not just as a store of value, but as a potential medium of exchange. While Tether Gold already digitized physical bullion for blockchain use, Scudo is intended to remove what many consider the final barrier to everyday usability: complex fractional pricing.

Paolo Ardoino, Tether’s chief executive, has repeatedly emphasized that user experience is critical for broader adoption. By simplifying how gold is denominated on-chain, Tether is positioning Scudo as a bridge between traditional monetary history and modern digital payments.

Scudo Versus Pax Gold: Different Philosophies

The introduction of Scudo has naturally drawn comparisons with Pax Gold, a gold-backed token issued by Paxos Trust Company. PAXG is regulated by the New York Department of Financial Services and is widely viewed as one of the most compliant gold-backed tokens in the market. Each PAXG token represents one troy ounce of physical gold held in regulated vaults.

At a fundamental level, both XAU₮ and PAXG provide tokenized exposure to physical gold. The key difference lies in their design priorities and target use cases.

PAXG supports fractional transfers, allowing users to send small amounts of gold. However, it does not define a fixed sub-unit comparable to Scudo. Tether’s approach introduces a standardized micro-unit that could make gold-based microtransactions more intuitive.

PAXG has gained traction among institutional investors and DeFi participants who prioritize regulatory clarity and U.S. oversight. XAU₮, on the other hand, benefits from Tether’s global reach and liquidity, particularly in regions where access to U.S.-regulated products may be limited.

Rather than a direct confrontation, Scudo appears to represent an alternative vision focused on usability and everyday payments rather than institutional compliance alone.

Adoption Timeline and Wallet Support

At launch, Scudo exists primarily as a conceptual and accounting upgrade. Most major wallets do not yet display balances in Scudo units, and users must still enter fractional XAU₮ amounts manually when sending transactions.

Tether’s open-source Wallet Development Kit is expected to accelerate adoption by enabling developers to integrate Scudo displays more easily. Early wallets built on this framework could support Scudo-denominated balances as early as January or February 2026.

Larger wallet providers such as MetaMask and Trust Wallet are widely expected to evaluate support in the first half of 2026, although no official timelines have been announced.

If widely adopted, Scudo could significantly change how users interact with tokenized gold, particularly for smaller payments and peer-to-peer transfers.

Broader Implications for Digital Gold

The launch of Scudo highlights a broader trend within the crypto industry: the push to make real-world assets more practical on-chain. Tokenized gold has long promised a blend of stability and portability, but usability challenges have limited its role in everyday transactions.

By focusing on denomination rather than token mechanics, Tether is addressing a subtle but important friction point. Easier units may encourage experimentation with gold-based payments, particularly in regions experiencing high inflation or currency instability.

However, challenges remain. Regulatory scrutiny, competition from fiat-backed stablecoins, and the dominance of traditional payment systems all pose obstacles to widespread adoption. Whether Scudo can meaningfully expand gold’s role beyond long-term holding remains an open question.

Final Thoughts

Tether’s introduction of Scudo comes at a moment when interest in gold and alternative stores of value is accelerating. By redefining how gold is measured on-chain, Tether is attempting to modernize a centuries-old asset without altering its underlying trust structure.

While Scudo does not directly challenge Pax Gold on regulatory grounds, it introduces a usability-focused alternative that could appeal to a different segment of the market. As wallet support expands and on-chain activity evolves, Scudo may play a role in determining whether digital gold can move from a niche investment product to a practical financial tool.

For now, the launch signals Tether’s intent to push beyond stablecoins and continue experimenting with how traditional assets can function in a blockchain-native economy.

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