- Tether Gold (XAU₮) has received Shariah certification, expanding its reach in Islamic finance.
- The approval could boost adoption as demand for tokenized gold grows.
Tether Gold (XAU₮) has received Shariah certification from Amanah Advisors, paving the way for wider adoption in Islamic finance. The approval confirms that the gold-backed asset meets key Islamic finance principles, potentially expanding its use among Islamic banks, institutions, and individual investors worldwide.
The certification comes as demand for tokenized gold continues to rise. Over the past year, Tether Gold’s total value locked has grown from about $826 million to $2.86 billion, highlighting increasing investor interest in blockchain-based access to physical gold.
Tether Gold Meets Islamic Finance Standards
Tether announced on July 27 that Amanah Advisors, an Islamic finance advisory firm led by Mufti Faraz Adam, had reviewed XAU₮ and found it compliant with Shariah principles.
The review examined several areas, including the token’s ownership structure, physical gold reserves, transparency, and overall compliance with Islamic rules governing gold transactions. It also confirmed that XAU₮ avoids prohibited elements such as interest (riba), excessive uncertainty, and speculative derivatives.
Each XAU₮ token represents ownership of one troy fine ounce of physical gold stored in Swiss vaults on London Good Delivery bars. The physical backing played a key role in securing the certification.
Certification Could Expand Institutional Adoption
The approval may allow Islamic financial institutions to integrate Tether Gold into a wider range of products and services.
Potential use cases include:
- Halal savings products
- Institutional gold investments
- Takaful (Islamic insurance)
- Trade finance
- Gold-backed collateral and lending
Because every token is backed by allocated physical gold, institutions can offer blockchain-based exposure without relying on synthetic products.
Tether CEO Paolo Ardoino said the certification strengthens the connection between traditional gold investing and blockchain technology. He noted that gold has long represented stability and trust across different cultures and generations.
Markets across the Gulf Cooperation Council (GCC), South Asia, Africa, and other regions with large Muslim populations could benefit from broader access to the asset.
Abu Dhabi Recognition Adds More Momentum
The Shariah certification follows another important development in the Middle East.
The Abu Dhabi Global Market (ADGM) recently recognized XAU₮ as an Accepted Spot Commodity. This status allows authorized financial firms operating within ADGM to support the token, provided they obtain the necessary regulatory approvals.
The recognition places Tether Gold alongside USDT, which ADGM previously approved under a separate regulatory category for fiat-referenced tokens. Together, these approvals strengthen Tether’s presence in one of the region’s leading financial centers.
What the Approval Means for Investors
The Shariah certification does not change the legal or regulatory status of Tether Gold in the United States. Instead, it serves as an independent confirmation that the token’s structure aligns with Islamic finance principles.
Investors should still evaluate factors such as custody arrangements, liquidity, redemption options, tax obligations, and counterparty risk before investing.
Meanwhile, Tether continues to expand XAU₮’s utility beyond simple ownership. Through its partnership with Bitcoin lending platform Ledn, eligible holders are expected to use Tether Gold as collateral for loans while maintaining exposure to the underlying physical gold.
As tokenized real-world assets continue gaining traction, the latest certification and regulatory recognition could help Tether Gold attract more institutional users and strengthen its position in the growing digital gold market.
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