Tether’s gold-backed token, XAU₮, has secured Shariah certification, paving the way for its adoption within Islamic finance sectors worldwide. Each XAU₮ token corresponds to one troy ounce of LBMA-certified physical gold held in Swiss vaults, and trades as an ERC-20 token on Ethereum. This certification is significant because it aligns the token with Islamic financial principles, potentially attracting new investors across the Gulf region and beyond.

Certification Details and Regulatory Recognition

Islamic finance prohibits earning interest (riba), excessive uncertainty (gharar), and gambling-like speculation (maysir). For a crypto asset to be Shariah-compliant, it must be backed by real assets and structured to avoid these prohibitions. Tether’s XAU₮ passed scrutiny from major Shariah evaluators such as Sharlife and CoinStudy, the latter awarding it a score of 81 out of 100. However, Halalscreener rated it as “Doubtful” with a score of 50, mainly due to concerns about the issuer’s operational aspects rather than the gold backing itself.

On July 24, 2026, Abu Dhabi Global Market (ADGM) officially recognized XAU₮ as an Accepted Spot Commodity. This recognition enables licensed firms within ADGM to provide services involving XAU₮, further establishing its legitimacy in one of the Middle East’s key financial centers.

Strategic Moves and Market Implications

Tether has been preparing for this breakthrough since early 2026. The company committed $150 million to Gold.com in February, a platform specializing in gold distribution, with $20 million earmarked specifically for XAU₮. In April, Tether teamed up with Fasset to develop a gold-backed Visa neobank card targeting Islamic finance users, alongside plans to launch Shariah-compliant yield products based on XAU₮. For these initiatives, Tether allocated up to $1 million in tokens for user rewards.

While XAU₮ has taken the lead in achieving Shariah compliance, other tokenized gold products like Paxos Gold (PAXG) have not pursued similar certifications. Some experts question whether the upcoming Shariah-compliant yield offerings can fully avoid the conventional pitfalls that make typical yield products non-compliant under Islamic rules.