Tether’s gold-backed token, XAUt, has received Shariah certification, the company announced. The move is designed to make the token accessible to Islamic financial institutions and investors who require compliance with Islamic law.
What the certification means
Shariah-compliant finance prohibits interest (riba) and requires that investments be backed by tangible assets. XAUt is a digital token that represents ownership of physical gold stored in vaults. The certification confirms that the token meets these religious standards, allowing observant Muslims to invest in gold without violating their faith.
The certification was issued by a recognized Shariah advisory body, though Tether did not name the specific board or scholars involved. The company said the approval aims to “expand access” to its gold-backed token among Islamic financial institutions and investors.
Why gold-backed tokens matter in Islamic finance
Gold has long been a permissible asset in Islam, but digital tokens that track its price have faced scrutiny over whether they constitute real ownership. By obtaining Shariah certification, Tether’s token provides a way for Muslims to gain exposure to gold through a regulated digital instrument. This could open up a new market for the company, especially in the Middle East and Southeast Asia, where Islamic finance is growing.
The token itself is not new; Tether launched XAUt in 2020 as a way to trade gold digitally. Each token is supposed to represent one troy fine ounce of gold held in a London vault. The certification adds a layer of religious compliance that may attract institutional investors who previously avoided the product.
What’s next for XAUt
Tether has not said whether it will seek additional Shariah certifications from other bodies or expand the token’s availability on specific exchanges. The company is likely to market the token to Islamic banks and wealth managers who are looking for Shariah-compliant digital assets. The certification could also prompt other stablecoin issuers to pursue similar approvals.
For now, the token remains available to all investors, but the Shariah certification gives it a distinct label that may boost adoption in a market that has been cautious about cryptocurrencies.
