Stablecoin giant Tether now holds nearly 80 metric tons of gold amid a broader effort to hedge against currency instability.
Tether has revealed it is now storing $8 billion worth of gold, nearly 80 metric tons, in a private vault it owns in Switzerland. Meanwhile, the exact location of the vault remains undisclosed.
Nonetheless, the move reflects Tether’s intention to gain greater control over its reserves while lowering long-term operational expenses.
Tether’s Physical Gold Push
As of March 2025, Tether’s public filings show that approximately 5% of its reserves are in precious metals. Gold accounts for the majority of that amount.
Meanwhile, the value of its bullion holdings now rivals that of UBS Group AG. This places the stablecoin issuer in a class typically dominated by central banks and sovereign treasuries.
Unlike most industry players, Tether has chosen to independently manage its vault operations rather than rely on third-party custodians. The company argues that the cumulative costs of outsourced storage, often around 0.5% annually, are significant. These costs can be substantially reduced by taking vault ownership in-house.
Essentially, Tether sees managing its own vault as more economical at scale.
XAUT: The Gold-Backed Stablecoin
In addition to its primary token, USDT, Tether continues to grow its gold-backed digital asset, XAUT. Each unit of XAUT is backed by one troy ounce of gold and can be redeemed for physical metal in Switzerland. Currently, around 7.7 tons of gold underpin XAUT, valued at roughly $819 million.
While the scale of XAUT is still modest compared to major ETFs like SPDR Gold Shares, which holds nearly 950 tons of gold, Tether sees ample room for expansion. If the token reaches a $100 billion market value, vault ownership could become extremely valuable. It might yield hundreds of millions in savings on storage fees alone.
Regulatory Hurdles Loom
Despite the strategic benefits, Tether’s gold-centric approach may face compliance challenges in major jurisdictions. Regulations in both the European Union and the United States increasingly restrict the types of assets permitted to back fiat-linked stablecoins.
These rules typically limit the backing assets to cash or short-term government debt. Gold, under these frameworks, does not qualify.
Should Tether seek formal regulatory approval for USDT in those regions, it may need to divest its gold-backed components to meet legal requirements. However, XAUT, being a separate, gold-pegged asset, currently falls outside the scope of such restrictions.
A Hedge Against Currency Instability
Tether’s leadership views this gold strategy as a response to growing global economic instability and waning trust in traditional currencies. The company believes that physical assets such as gold offer more enduring value than fiat money. This is especially true amid rising debt levels in major economies.
Notably, the recent 25% rise in gold prices supports this narrative, driven in part by demand from central banks, particularly in BRICS nations, which have been aggressively increasing their gold reserves.
By building its own vault infrastructure and increasing physical gold holdings, Tether signals a long-term vision that extends beyond stablecoins.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
