Tether stores $8 billion worth of gold in Switzerland

What’s new? Tether, the issuer of the largest stablecoin USDT, owns almost 80 tons of gold worth $8 billion, which are stored in a dedicated vault. Such holdings make Tether one of the world’s largest holders of the precious metal, if you exclude banks and governments.

Material by Bloomberg

What else is known? The vault is located in Switzerland, but the company declined to disclose its exact location or date of creation for security reasons.

“We have our own vault. I believe it’s the most secure vault in the world,” Tether CEO Paolo Ardoino said in an interview.

The decision to create its own vault instead of paying operators, which the precious metals industry usually resorts to, was dictated by cost considerations, the top executive clarified.

The USDT issued by Tether ranks third in the overall ranking of cryptocurrencies after bitcoin and Ethereum, with a capitalization of $158,7 billion. The company issues USDT in exchange for dollars and uses that collateral to invest in US Treasuries and other assets. According to a March report, precious metals make up nearly 5% of the company’s reserves.

The amount of gold in Tether’s vault roughly matches the total value of precious metals and other commodities held by UBS Group AG, one of the few major banks that publish such information in their quarterly reports.

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Tether has attracted increased attention from regulators around the world, in part because of past problems with reserve transparency. Concerns have also stemmed from the fact that as USDT has grown in popularity, significant movements of funds have occurred outside the formal banking system.

Tether itself, headquartered in El Salvador, has repeatedly emphasized its focus on emerging markets, where a large part of the population lacks access to banking services and faces high inflation of the national currency.

New rules on the regulation of stablecoins adopted in various jurisdictions generally exclude the use of gold and other alternative assets as reserves.

For example, MiCA rules introduced in the European Union last year and the GENIUS bill being considered by the US Congress allow only cash and equivalent assets, such as short-term government bonds, to be used as collateral for fiat currency-pegged stablecoins.

These rules require Tether to sell gold from USDT reserves to operate in local markets.

Tether itself declined to obtain a license under MiCA, but in late May, its backed companies StablR and Oobit launched their own coins on the EU market.

At the same time, Ardoino said the company would launch a new stablecoin on the US market in early 2026.

In addition to USDT, the company has a token called XAUT, backed by a 1:1 ounce of gold. The tokens can be exchanged for physical gold in Switzerland. The company has issued tokens equivalent to 7,7 tons of gold, or $819 million, which is insignificant compared to more liquid exchange-traded funds (ETFs) based on the precious metal, the largest of which holds nearly 950 tons.

“Gold, I think should be logically a safer asset than any national currency. So eventually I think that if people start to get concerned about the potential increase of the debt of the United States, they might look at alternatives,” Ardoino said.

Gold prices have risen about 25% this year as investors seek safe havens to protect themselves from geopolitical tensions and the fallout from trade wars. Strong demand from central banks and government agencies has also supported prices.

“Every single central bank in the BRICS countries is buying gold, so that is why gold price went up in our opinion,” Ardoino said.