Tether Gold has secured Shariah certification for XAU₮, widening the gold-backed token’s potential use among Islamic banks, institutions, and individual investors.
Summary
- Amanah Advisors certified XAU₮ after reviewing its structure against Islamic finance principles.
- Each XAU₮ token represents one troy fine ounce of physical gold held in Swiss vaults.
- Tether Gold’s locked value has more than tripled to about $2.86 billion over the past year.
- The approval follows XAU₮’s recognition as an Accepted Spot Commodity in Abu Dhabi.
XAU₮ receives Shariah approval from Amanah Advisors
Tether announced on July 27 that XAU₮ had received Shariah compliance certification from Amanah Advisors, a global Islamic finance advisory firm led by Mufti Faraz Adam.
The review covered the token’s ownership model, reserve transparency, physical backing, and compliance with Islamic rules governing gold transactions. Amanah Advisors also assessed whether the product involved interest, leverage, or speculative derivatives.
According to Tether’s announcement, the certification found that XAU₮ meets the main requirements of Islamic finance. These include clear ownership of a real asset and the absence of riba, the Islamic term for interest.
TG Commodities, S.A. de C.V. issues XAU₮. Each full token represents ownership of one troy fine ounce of gold on a London Good Delivery bar stored in a Swiss vault.
Certification opens access to Islamic finance markets
Shariah approval could make XAU₮ available for a broader range of Islamic financial products, including halal savings (savings permitted under Islamic law), institutional gold allocations, takaful services (Islamic insurance), trade finance, and collateralized lending.
Islamic finance generally requires transactions to involve identifiable assets while avoiding interest, excessive uncertainty, and gambling-like speculation. XAU₮’s connection to allocated bullion gives institutions a way to provide blockchain-based gold exposure without replacing the underlying physical asset with a synthetic contract.
Tether CEO Paolo Ardoino described the certification as a bridge between established demand for gold and blockchain-based financial infrastructure.
“Gold has always represented stability and trust across cultures and generations.”
He added that the recognition could expand access to digital gold while respecting the principles followed by Islamic financial institutions.
Potential growth markets include Gulf Cooperation Council countries, South Asia, Africa, and other regions with large Muslim populations and established demand for physical gold.
Abu Dhabi status strengthens Tether Gold’s position
The certification follows another regulatory development for XAU₮ in the Middle East. Abu Dhabi Global Market recently recognized the token as an Accepted Spot Commodity, allowing firms within the financial center to support it when they hold the required regulatory permissions.
The ADGM designation does not allow every company operating in the center to offer XAU₮ automatically. Eligible firms must still obtain approval to use Accepted Spot Commodities and hold permissions covering the relevant services.
ADGM had previously recognized Tether’s USDT as an Accepted Fiat Referenced Token. The two assets fall under separate regulatory categories, but their recognition gives Tether a route to place both its dollar-backed stablecoin and gold-backed token within the Abu Dhabi financial center.
Data cited by crypto.news showed that Tether Gold’s locked value rose from about $826 million to roughly $2.86 billion over the past year, marking an increase of more than threefold. The rise reflects stronger demand for tokenized gold as investors seek blockchain-based access to bullion.
What the approval means for US investors
Shariah certification does not change XAU₮’s legal or regulatory status in the United States. Instead, it confirms that Amanah Advisors considers the token’s structure compatible with Islamic finance principles.
US investors can view the approval as an additional assessment of XAU₮’s asset-backing model, but it does not replace their own review of custody, liquidity, redemption terms, counterparty exposure, or tax treatment.
Tether has also worked to expand XAU₮ beyond trading and custody. Its partnership with Bitcoin lending company Ledn is expected to let eligible holders use the token as collateral for loans, extending its role into liquidity services while retaining its physical gold backing.
The Shariah certification and Abu Dhabi commodity recognition could support wider institutional adoption, although access will continue to depend on local regulations and the permissions held by participating financial firms.
