Tether Gold's XAU₮ Wins Shariah Certification, Opening Doors for Islamic Finance

Tether Gold's XAU₮ has secured Shariah certification, a milestone that could broaden demand among Islamic banks, institutions and retail investors seeking halal exposure to gold. Tether said on July 27 that Amanah Advisors, a global Islamic finance advisory firm led by Mufti Faraz Adam, reviewed XAU₮ and determined it aligns with core Shariah principles. The review focused on the token's ownership framework, reserve transparency and physical backing, and assessed whether the structure involves riba (interest), leverage or speculative derivatives. Amanah Advisors concluded XAU₮ meets key requirements, including verifiable ownership of a real underlying asset and the absence of interest. Issued by TG Commodities, S.A. de C.V., each XAU₮ token represents one troy fine ounce of gold from a London Good Delivery bar stored in a Swiss vault. The direct linkage to allocated bullion, rather than synthetic exposure or paper-only claims, was cited as central to its Shariah compatibility and its potential suitability for halal financial products. The certification could pave the way for use cases such as Shariah-compliant savings products, institutional gold allocations, takaful (Islamic insurance), trade finance and select forms of collateralized lending, areas where Islamic law typically requires identifiable underlying assets and prohibits interest or excessive uncertainty. Tether CEO Paolo Ardoino described the move as "a bridge between established demand for gold and blockchainbased financial infrastructure," arguing it can expand access to digital gold while remaining consistent with Islamic finance principles. The development adds to XAU₮'s momentum in the Middle East. Abu Dhabi Global Market (ADGM) has recognized XAU₮ as an Accepted Spot Commodity, allowing firms in the financial center to support the token if they hold the required regulatory permissions. The status does not automatically authorize all ADGM entities to offer XAU₮; firms must still obtain specific approvals. ADGM has also recognized Tether's USDT as an Accepted Fiat Referenced Token, strengthening Tether's regulatory footing in Abu Dhabi across both its dollar- and gold-backed products. Investor appetite for tokenized gold appears to be rising. Data cited by crypto.news shows Tether Gold's locked value climbed from about $826 million to roughly $2.86 billion over the past year, more than tripling. Tether and advisers also emphasized the limits of the designation. Shariah certification is a religious-ethical endorsement and does not alter XAU₮'s legal or regulatory status in jurisdictions such as the United States. U.S. investors are still advised to evaluate custody, liquidity, redemption terms, counterparty risk and tax implications. Tether is also working to expand XAU₮ beyond trading and custody. Through a partnership with Bitcoin lending firm Ledn, eligible holders are expected to be able to use XAU₮ as loan collateral, extending tokenized gold into lending and liquidity services while maintaining physical backing. Combined with ADGM recognition and the increase in locked value, the Shariah certification could accelerate institutional and regional adoption of XAU₮, particularly across the Gulf Cooperation Council, South Asia and Africa, where demand for physical gold is strong. Broader uptake will still depend on local regulation and the permissions held by financial firms that choose to offer the token.