Elemental Royalty announced it will offer investors the option to receive dividends in Tether’s XAUT, a tokenized gold product. This marks a novel Wall Street application for digital gold, allowing shareholders direct ownership of physical gold through their quarterly payments. The firm’s stock price fell 7.8% following the announcement, while XAUT’s market capitalization has grown to $2.5 billion amid a surge in gold prices.
Publicly traded gold royalty company Elemental Royalty announced a plan to allow investors to receive dividends in the form of Tether’s gold-backed token, XAUT. This creates a new corporate finance use case for tokenized assets on Wall Street, providing investors with direct ownership of physical gold.
The firm stated investors can still take traditional cash distributions for the total 12-cent dividend. “The decision to offer investors a dividend in kind, in the form of Tether Gold, further differentiates Elemental as a forward-thinking, growth-oriented investment,” CEO David Cole said in a press release. Elemental’s stock price fell 7.8% to $19.41 on Tuesday.
Tether CEO Paolo Ardoino described the integration as a significant step for the industry. “This marks a major step forward for the gold industry and shows how tokenized assets can unlock new financial models that were previously out of reach,” he stated in a separate press release.
Tether’s XAUT has grown to a $2.5 billion market cap, having peaked at $3.5 billion recently as gold prices surged. Earlier this month, Ardoino estimated the company holds roughly 140 tons of gold, valued around $24 billion, to partially back its stablecoins.
The token faces competition from PAX Gold, which has a $2.2 billion market capitalization. Market maker Wintermute recently began executing over-the-counter trades in both tokens for financial institutions, citing robust round-the-clock demand.
