Tether Gold’s digital token, backed by physical gold (XAU₮), is now certified as compliant with Shariah law. This opens up opportunities for it to be used by a wider range of customers including Islamic banks, financial institutions, and individual investors who follow these principles.
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
On July 27th, Tether reported that its gold-backed token, XAU₮, has been certified as compliant with Shariah law by Amanah Advisors, a leading Islamic financial consulting company headed by Mufti Faraz Adam.
The review examined the token’s structure, how openly its reserves are shared, whether it’s truly backed by physical gold, and if it follows Islamic guidelines for gold trading. Amanah Advisors also checked if the product uses interest, borrowing, or risky investment strategies.
Tether reports that its XAU₮ token has been certified as compliant with Islamic finance principles. This means it demonstrably owns the underlying asset and doesn’t involve interest, which is prohibited in Islamic finance (known as ‘riba’).
TG Commodities issues XAU₮ tokens, where each token guarantees ownership of one troy ounce of physical gold held securely in a Swiss vault. This gold meets the standards for delivery on the London market.
Certification opens access to Islamic finance markets
If XAU₮ receives Shariah approval, it could be used in a wider variety of Islamic financial services. This includes savings accounts that follow Islamic law (halal savings), investments in gold for institutions, Islamic insurance (takaful), trade financing, and loans secured with collateral.
As an analyst, I’ve been looking closely at Islamic finance principles, which typically require transactions to be backed by real assets and avoid interest, excessive risk, and speculative practices. What’s interesting about XAU₮ is that its link to actual, allocated gold bullion offers institutions a way to give their clients access to gold on the blockchain *without* relying on synthetic or derivative contracts. Essentially, it provides blockchain-based gold exposure while maintaining a direct connection to the physical asset.
Tether CEO Paolo Ardoino explained that this certification connects traditional demand for gold with the modern world of blockchain finance.
“Gold has always represented stability and trust across cultures and generations.”
He explained that this approval could make it easier for people to use digital gold, all while staying in line with the rules of Islamic finance.
Countries in the Gulf Cooperation Council, South Asia, and Africa, as well as other regions with significant Muslim communities and a history of buying gold, represent promising new markets for growth.
Abu Dhabi status strengthens Tether Gold’s position
As an analyst following the digital asset space, I’m seeing continued positive regulatory developments for XAU₮ in the Middle East. Just recently, Abu Dhabi Global Market designated the token as an Accepted Spot Commodity. This is significant because it allows firms operating within that financial center to support XAU₮, provided they have the necessary regulatory approvals.
Just because a company operates within the ADGM doesn’t automatically mean it can offer XAU₮. Approved companies still need to get permission to trade Accepted Spot Commodities and have the right licenses for those services.
Abu Dhabi Global Market (ADGM) had already approved Tether’s USDT as a valid currency reference. While these two assets are regulated differently, this approval allows Tether to offer both its USD-based stablecoin and its gold-backed token within Abu Dhabi’s financial hub.
According to data from crypto.news, the value of Tether Gold has more than tripled in the last year, jumping from around $826 million to approximately $2.86 billion. This increase suggests growing interest in digital gold as investors look for ways to buy and access gold using blockchain technology.
What the approval means for US investors
Receiving Shariah certification doesn’t alter the legal or regulatory standing of XAU₮ in the U.S. It simply means Amanah Advisors has verified that the token aligns with the rules of Islamic finance.
U.S. investors should see this approval as another check on how XAU₮ maintains its value, but they still need to do their own research into things like safekeeping, how easily it can be bought and sold, the terms for getting your money back, who they’re dealing with, and any taxes involved.
Tether is developing uses for XAU₮ beyond just buying and holding it. For example, a new partnership with Ledn will allow qualifying users to borrow money using XAU₮ as collateral – meaning they can get loans while still benefiting from the token being backed by physical gold. This expands what XAU₮ can do within the financial system.
Receiving Shariah certification and approval for use in Abu Dhabi’s commodities market may encourage more institutions to adopt this technology, but ultimately its availability will still be governed by local rules and each firm’s specific licenses.
2026-07-27 23:03