At Tether, we hold a deep sense of responsibility towards maintaining a robust blockchain ecosystem for USD₮ and all other tokens we issue. To fulfill this commitment, we periodically assess the current transport layers, striving to strike a balance between maintainability, usage statistics, and community interest.

A key factor in deciding to bring USD₮ to a specific blockchain is the level of community interest. We carefully evaluate the effort required, encompassing security, customer support, compliance, and regulatory oversight, to ensure the security, usability, and sustainability of the chosen blockchain. If a blockchain lacks significant traction over an extended period and shows no signs of recovery in usage indicators, maintaining support becomes inefficient and may jeopardize security and oversight.

Therefore, after careful consideration, Tether will embark on a strategic transition, discontinuing support for the Kusama, Bitcoin Cash SLP and Omni Layer implementations. 

We understand the significance of this decision, particularly for Omni, as it was the first transport layer that Tether used in 2014. The Omni Layer, built on top of Bitcoin, played a crucial role in Tether's early journey, and we acknowledge the contributions and innovations the team has made to the crypto landscape.

However, over the years, the Omni Layer faced challenges due to the lack of popular tokens and the availability of USD₮ on other blockchains. This led many exchanges to favor alternative transport layers, leading to a decline in USD₮ usage on Bitcoin using the Omni Layer.  As a principled organization, we must remain consistent and transparent, and adhere to open processes, even if it entails difficult choices.

Yet we believe in the potential of the Omni Layer and the transformative power of decentralized exchanges. Increased utilization of the Omni Layer's decentralized exchange and its token issuance protocol (including NFTs) would allow us to reconsider issuing USD₮ on Bitcoin via Omni in the future.

We want to emphasize that Tether's team is rooted in the belief of leveraging the most secure, audited, and decentralized blockchain ever built: Bitcoin.  We are also actively contributing to developing RGB, a client-side validated state and smart contracts system operating on Layer 2 and 3 of the Bitcoin ecosystem. RGB functions both on-chain (Bitcoin L1) and on the Lightning Network, promising unparalleled scalability.  We firmly believe that RGB will usher in a new era for digital assets, smart contracts, and digital rights, garnering comprehensive support from major players in our industry.  Once USD₮ on RGB goes live, the world will witness USD₮ on another super-powerful and scalable Bitcoin layer.

We believe the market should decide which protocols and blockchains are utilized for the transfer of value.  We will continue to support the protocols and chains that the community finds useful and encourage the community to expand the use cases of USD₮ on every protocol.

The transition process will move forward as follows:

• Tether will cease minting USD₮-Omni, USD₮-Kusama, and USD₮–BCHSLP from today, 17th August 2023

• Tether will continue to redeem USD₮-Omni, USD₮-Kusama, and USD₮-BCH-SLP as normal for at least the next 12 months. Tether may evaluate and announce further changes around that time. 

• Users can also swap USD₮-Omni, USD₮-Kusama, and USD₮-BCH-SLP for other chains on platforms that support these assets, such as Bitfinex.

We want to assure our community that this transition will be executed meticulously and with minimal disruption. Our top priority remains delivering a seamless user experience, and we are committed to facilitating a hassle-free transition. We sincerely appreciate your continued support and trust in Tether. Together, we are paving the way for a more vibrant and dynamic future for stablecoin adoption. Your feedback and understanding are invaluable as we evolve to meet the ever-changing needs of the crypto community.

The World Gold Council's Gold Demand Trends recently highlighted several key metrics which show gold is becoming an increasingly attractive investment due to changing macroeconomic circumstances. Let's explore what this means for XAU₮, as the easiest way to hold and transact with gold.

Investment Demand

The first half of 2023 saw a resurgence in investment demand for gold.  Physical gold investment rose 56% year-on-year in Q2, reaching a four-year high of 594.5 tonnes. This was driven by strong retail investment demand in the East, particularly in China and India, where gold purchases were up by 52% and 37% respectively.

In fact, growth in purchases of gold coins and gold bars helped offset slower buying activity via central banks. Turkey and Iran replaced Germany and Switzerland in the top 5 bar and coin markets in the first half of 23.

Central Banks, China and Turkey

Central banks have been net buyers of gold for 11 consecutive years and the first half of 2023 was no exception. Despite a slowdown in Q2, net buying was 39% higher year-on-year, with total purchases amounting to 333.2 tonnes. This was driven by a diverse group of buyers, with purchases from 10 central banks.

China, the world's largest gold consumer, saw its gold reserves rise by 74 tonnes, while Turkey's gold reserves fell by 137 tonnes due to sales and swaps with domestic banks. These activities by central banks underscore the strategic importance of gold as a reserve asset.

Central bank buying activity is the highest first half total on record. Despite substantial sales from Turkey impacting the total, 7 in 10 central banks surveyed believe that gold reserves will increase in the next 12 months.

Gold Supply Dynamics

The supply of gold has also seen interesting developments. Total gold supply increased by 7% year-on-year in Q2. This resulted in a 5% increase in total supply produced during the first half of 2023 at 2,460 tonnes, driven by a 3% growth in mine production to a record H1 level.

Mine production reached an all-time high in Q2 2023 at 923 tonnes, the highest second-quarter production level in records dating back to 2000. This, combined with Q1 2023 production of 857 tonnes, generated a record mine production of 1,781 tonnes, 2% higher than the previous record set in 2018.

Recycled gold volumes in Q2 rose by 13% year-on-year, lifting recycling to its highest level since 2016. This increase was driven by three factors in China: recovery from COVID disruptions last year, disappointing trade fairs triggering wholesale inventory recycling and price-sensitive recycling supply due to strong local currency prices.

China and India drove Q2 recycled gold supply up 13% year-on-year, contributing to the overall increase in gold supply.

The Impact on Tether Gold (XAU₮)

Increasing demand for gold and a positive supply picture, all point to a strong case for considering Tether Gold (XAU₮) in portfolios. XAU₮ is an attractive alternative for those looking to tap into the robust gold market while enjoying the benefits of digital assets.

Why Tether Gold Makes Gold Easier

For the average person, owning gold can be a hurdle. They must navigate the physical purchasing and storage of the gold. Few people want to hold a considerable quantity of such an easily identifiable asset such as gold in their home, however, storing it with a professional custodian can be expensive and difficult. Verification is also an issue, it is challenging for the average person to confirm they bought actual gold rather than a substitute metal plated in gold.

XAU₮ provides easily accessible, verifiable, gold on-demand with all of the benefits of blockchain: 1) XAU₮ can be transported with you anywhere you go using any compatible wallet 2) XAU₮ is divisible into increments as small as 0.000001 troy ounces of gold 3) XAU₮ can be bought and sold with ease 24/7, on several exchanges including Bitfinex, OKX, Huobi and many others. 4) XAU₮ can be redeemed for physical gold to any Swiss address or personally picked up from the vault 5) XAU₮ storage is as easy as storing any other crypto asset 6) XAU₮ can be verified and tracked at any time via the Tether Gold website 7) XAU₮ has no custodian fees XAU₮ is the easiest choice for the average person to increase their gold allocation, and for the crypto savvy it has the benefits of being stored alongside all of your other crypto assets. As global monetary conditions continue to change, central banks and institutional investors are increasingly seeking out hard assets and safe haven assets. Gold has a long history of serving both purposes.

Chart and Data Source

World Gold Council. (2023). Gold Demand Trends Q2 2023. https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-q2-2023