Tether Acquires 32% Stake in Elemental Altus Royalties for $89.4 Million

Tether, the issuer of the world’s largest stablecoin by market capitalization, has acquired a 32% stake in Elemental Altus Royalties, a publicly listed gold royalty company based in Canada. The transaction, completed on June 10, involved the purchase of 78,421,780 common shares, representing approximately 31.9% of Elemental's total shares. This strategic move is part of Tether's long-term goal to integrate assets such as gold and Bitcoin into its ecosystem, aiming to build a robust and decentralized digital economy infrastructure.

The acquisition was completed offshore via a private agreement, with Tether also signing an optional agreement with AlphaStream Limited and Alpha 1 SPV Limited, its fully owned subsidiary, to purchase an additional 34,444,580 Elemental common shares. This secondary deal, if executed, will take place outside of Canada before October 29, pending approval from Elemental. The transaction was made at a price of $1.55 Canadian dollars ($1.14) per share, costing Tether approximately $89.4 million.

Paolo Ardoino, Tether's CEO, emphasized the significance of this investment, stating that it reflects Tether's forward-looking strategy to build a more resilient and transparent financial system. Ardoino highlighted that while Bitcoin continues to mature as a hedge against monetary inflation, gold remains a tested store of value. This investment in gold aims to diversify Tether's portfolio and enhance the backing of its stablecoin ecosystem.

By acquiring ELE shares, Tether targets diversified exposure to global gold production through a royalty and streaming model, which avoids direct operational risks of gold mining. This model aligns with Tether’s preference for strategic, low-risk exposure to real-world assets that can enhance the transparency and stability of digital financial products. Tether’s exposure to a diversified gold royalties portfolio through Elemental allows the stablecoin issuer to strengthen the backing of its ecosystem and advance its gold-backed stablecoin Tether Gold, or XAUt (XAUT).

Tether’s interest in gold and Bitcoin is part of a dual-pillar strategy that the company has been adopting in recent years. The company currently holds 10,000 BTC and has a gold stack close to 80 tons of physical metal, in addition to its Tether Gold (XAUT), a gold-backed token. This diversification strategy is designed to create a more resilient and transparent financial system, positioning Tether as a leader in the digital economy.

The acquisition of a significant stake in Elemental Altus Royalties Corp. marks a major milestone for Tether, demonstrating its commitment to integrating traditional assets into its digital ecosystem. This move not only diversifies Tether's portfolio but also strengthens its position in the global financial market, aligning with its mission to build a robust and decentralized digital economy infrastructure. The announcement also hints at more commodity-backed digital assets planned by Tether in the future using its new exposure.