Tether emerges as major player in global gold market

Tether Holdings, the crypto company behind the $186 billion stablecoin USDT, has become one of the largest private holders of physical gold in the world. The company owns about 140 tons of gold, valued at around $24 billion, stored in a highly secure former nuclear bunker in Switzerland. The vault has multiple layers of steel doors and extreme security, reflecting the scale and importance of Tether’s bullion holdings.

Over the past year, Tether bought more than 70 tons of gold for its reserves and its gold-backed token, Tether Gold (XAUT). The company continues to purchase one to two tons of gold per week and plans to maintain this pace for the coming months. Its accumulation is larger than almost any single exchange-traded fund and rivals the purchases of central banks.

Tether’s strategy reflects its approach to gold as a reserve asset that is not linked to government debt. The company treats gold like a central bank would, using it to back its stablecoin, to support its gold token XAUT, and to hedge against risks in fiat currencies such as the U.S. dollar. Investors in emerging markets have shown strong interest in gold as protection against local currency declines, which aligns with Tether’s growth strategy.

Tether is not only hoarding gold but also expanding its role in the bullion market. The company has hired senior traders from major banks and is exploring active trading of physical gold. It is also investing in gold royalty companies, acquiring stakes in mid-sized Canadian firms to diversify exposure and capture revenue streams from gold mining. These moves show that Tether intends to influence the global gold market beyond holding bullion.

The company’s purchases are one factor behind gold’s rise to record prices above $5,200 an ounce. Analysts say Tether is a significant buyer, but not the only driver of the market rally. Central banks and exchange-traded funds collectively bought more than 1,500 tons of gold last year. Tether’s steady and transparent accumulation has nonetheless added pressure to supply and influenced market dynamics.

Tether Gold (XAUT) represents roughly 60 percent of the gold-backed stablecoin market. Each token is backed by physical gold in the Swiss vault. Tether also introduced Scudo, a smaller denomination equivalent to one-thousandth of a troy ounce of gold, designed to make gold more accessible for everyday transactions. This reflects the company’s goal of integrating gold into digital finance while maintaining transparency for investors.

Tether’s strategy involves risk. Holding large amounts of physical gold requires complex logistics, secure storage, and careful market management to avoid disrupting prices. The company also invests in Bitcoin and U.S. Treasuries, balancing its exposure across multiple assets. Its diversification strategy aims to protect USDT while capturing opportunities in both crypto and traditional markets.

The implications of Tether’s gold accumulation are significant. By acting like a private central bank, the company challenges traditional financial institutions in the bullion market. Its combination of physical gold, tokenization, and trading ambitions could reshape how gold is used in both crypto and conventional finance. Some observers note that Tether’s moves may inspire other countries or firms to explore gold-backed digital currencies, potentially influencing the future of global monetary systems.

So far, Tether’s strategy has been successful. The company has supported the stability of its stablecoin and XAUT, while increasing its presence in the gold market. Its purchases and investments show a long-term commitment to physical assets and signal a new intersection between cryptocurrency and traditional financial markets.