Lying down to earn $5 billion! Stablecoin giant Tether hoards 140 tons of gold, becoming the world's largest private gold vault.

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Tether, the world's largest stablecoin company, has become a heavyweight player in the gold market. Its approximately 140 tons of gold reserves are worth about $24 billion, placing it among the world's top gold holders, second only to central banks, exchange-traded funds, and large commercial banks. This cryptocurrency giant is frantically stockpiling gold with a central bank-like strategy and plans to enter the gold trading business, competing head-on with traditional financial institutions such as JPMorgan and HSBC.

According to a report by the Financial Times on the 28th, as gold prices soared from $3,858 per ounce at the end of September last year to over $5,200, the value of Tether's gold holdings surged by more than $5 billion. In the fourth quarter of last year, the company acquired another 27 tons of gold for its gold-backed stablecoin, with just this portion increasing in value by at least $700 million this year. Heightened geopolitical uncertainty, U.S. President Trump's tariff threats, and remarks about seizing Greenland boosted gold prices to new highs repeatedly this year.

Tether CEO Paolo Ardoino recently stated in a Bloomberg interview that the company has been buying gold at a pace of about 1 to 2 tons per week, and plans to "continue this purchasing rhythm for at least the next few months." According to Bloomberg calculations, Tether bought over 70 tons of gold for its reserves and gold stablecoin throughout last year, surpassing nearly every single central bank’s reported purchases—only Poland increased its holdings more, with 102 tons.

According to the World Gold Council data, Tether's gold holdings are roughly equivalent to the size of Qatar’s central bank. Jefferies analysts pointed out in November last year, "Tether is the largest gold holder outside of central banks, with holdings roughly comparable to smaller central banks such as South Korea, Hungary, and Greece." The UK holds 310 tons of gold. In its research report, the investment bank stated, Tether, as "an important new buyer, may drive continued growth in gold demand," and its buying may have helped propel last year’s 65% surge in gold prices.

The Rapidly Expanding Gold Empire

Tether earns huge profits through its US dollar stablecoin USDT. USDT is an industry giant with a circulation of $187 billion. Stablecoins are a form of digital cash most used by traders to switch between fiat currencies and cryptocurrencies. The company collects real US dollars in exchange for USDT tokens, and invests these funds in U.S. Treasuries and other assets (such as gold), earning billions of dollars in interest and trading profits.

USDT is pegged 1:1 to the dollar, and Tether uses gold alongside other assets including bitcoin, U.S. Treasuries, and secured loans to back the stablecoin. The company also has a separate gold-backed token XAUT and stores gold in Swiss vaults.

According to Bloomberg, most of the approximately 140 tons of gold are Tether’s own reserves, as well as the physical gold backing its gold tokens. Reuters, citing Tether’s Q3 audit report, shows that as of the end of September, the gold value in reserves backing the USDT dollar stablecoin was $12.9 billion, equivalent to about 104 tons of gold at market prices at that time. As of the end of December last year, gold backing the XAUT token amounted to 16.2 tons.

Paolo Ardoino, in a Bloomberg interview, revealed that the company stores physical gold in a former nuclear bunker in Switzerland, guarded by several thick steel doors. "It’s a James Bond-style place," he said. "Absolutely crazy." This highly secure vault is one of Switzerland’s approximately 370,000 Cold War-era nuclear bunkers, now rarely used, but Tether's vault is highly active—more than a ton of gold is moved in each week.

Ardoino stated that owning physical metal is crucial. When asked whether the company would reduce gold purchases at some point, the 41-year-old Italian said:

"Maybe we will reduce, we don’t know yet. We will assess gold demand quarter by quarter."

From Reserves to Trading: Tether’s Gold Ambitions

Ardoino isn’t satisfied with just buying gold; he wants Tether to trade gold—going head-to-head with major banks like JPMorgan and HSBC who dominate the market.

To reflect its growing ambitions, the company has poached two senior gold traders from HSBC to help manage its gold market activities. Last year, when these two most senior HSBC gold traders left, industry speculation swirled about their next destination—few guessed it would be Tether.

Paolo Ardoino said the company needs "the world’s best gold trading platform" to continue buying gold long-term and to exploit potential market inefficiencies. He added the company is still analyzing the market, and potential trading strategies will be designed to "maintain a very long physical gold position."

Tether is studying how to actively trade its gold, including possibly capturing arbitrage opportunities when futures costs diverge significantly from physical gold prices. Buying roughly $1 billion of physical gold monthly is a logistical challenge. Ardoino said Tether purchases directly from Swiss refineries as well as the largest financial institutions in the market, with large orders sometimes taking months to fulfill.

He indicated the company is exploring ways to boost the efficiency of its gold purchase process, "because 1 to 2 tons per week is a very considerable amount."

Central Bank-like Strategic Positioning

In some ways, Tether’s attitude toward gold resembles that of central banks. Like central banks, it values gold’s liquidity and its status as a reserve asset that is not anyone’s debt. In a previous Bloomberg interview, Paolo Ardoino said gold is "logically a safer asset than any national currency."

This week, he stated that users of Tether’s dollar stablecoin in emerging markets are "exactly those who love gold and have always used gold to protect themselves from long-term currency devaluation by their own governments." "We believe the world is turning dark. We believe there is much turmoil."

Gold rose more than 1.5% on Wednesday, marking its eighth straight day of gains and a new high, after U.S. President Trump’s remarks indicated that he was satisfied with the dollar’s recent decline, which fell to its lowest since 2022.

Tether's bullish position on gold has also prompted it to acquire stakes in gold royalty companies, which buy income streams directly from gold miners. According to Bloomberg, the company now holds shares in nearly all mid-sized Canadian-listed royalty companies: Elemental Royalty Corp, Metalla Royalty & Streaming Ltd, Versamet Royalties Corp, and Gold Royalty Corp. Sources say the rapid accumulation of royalty company equities is led by Juan Sartori—a former Uruguayan senator, businessman, and co-owner of Premier League football club Sunderland.

In addition to physical gold, Tether has launched Tether Gold (XAUT), a gold token redeemable for physical gold, which accounts for 60% of the global gold-backed stablecoin supply. The company has also introduced a small-denomination version of the token called Scudo. Paolo Ardoino stated that XAUT is "very likely" to reach a market circulation of $5–10 billion by the end of the year. In this scenario, the company may need to buy more than 1 ton of gold weekly just for XAUT, not counting gold acquired for Tether's reserves.

Ardoino predicts that, although XAUT and other gold tokens remain insignificant compared to the over $500 billion ETF market, their era is coming soon. "My view is that some foreign nations are buying large amounts of gold, and we believe they will soon launch tokenized versions of gold as competitor currencies to the dollar," he said.

This Tuesday, Tether launched USAT, its U.S.-dedicated token compliant with the American Genius Act stablecoin legislation. The company is aiming to use the new stablecoin to expand into the U.S. market and last year hired Bo Hines, former head of Trump's crypto advisory committee, to strengthen ties with Washington.

Risks and Controversies

The company has long faced scrutiny over its reserves. Last year, S&P Global Ratings downgraded Tether’s reserve rating to its weakest due to rising exposure to high-risk assets, stating that the increased proportion of such assets had made token reserves "subject to greater market volatility."

According to the Financial Times, last November USDT was downgraded by S&P Global Ratings analysts to a "weak" stability rating. Analysts said their assessment "reflects increased exposure to high-risk assets in USDT reserves over the past year," including bitcoin, gold, secured loans, and corporate bonds, as well as limited disclosures.

Paolo Ardoino responded: "We proudly withstand your aversion," adding that the company has "no toxic reserves."

However, buying gold also involves risks. Any deviation from holding dollars could result in losses, thereby threatening the company's ability to keep its dollar stablecoin USDT always at $1 value. According to Reuters, as of the end of September, gold accounted for just 7% of the reserves backing USDT, while U.S. Treasuries dominated.

So far, Tether’s gold bet has been hugely successful. Its purchases coincided with the largest gold rally since the 1970s as investors and governments became wary of holding dollars. John Reade, chief strategist at the World Gold Council, said Tether's buying impacts gold prices, but is only a small reason for its extraordinary rise. "They’re part of the upward move, but nowhere near all of it," he said. But he also noted, "What’s really interesting is that a major player in the crypto field sees gold as the ultimate dollar devaluation trade."

Risk Warning and DisclaimerThe market involves risks, and investment needs caution. This article does not constitute personal investment advice, nor does it take into account individual users’ special investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their circumstances. Invest accordingly, at your own risk.

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