Tether Amasses $8 Billion Gold Reserve to Reduce Fiat Exposure

Tether, the issuer of the USDT stablecoin, has quietly amassed a gold reserve worth approximately $8 billion, stored in a private vault located in Switzerland. This revelation was made by Tether's CEO, Paolo Ardoino, in an interview. The company directly owns the majority of the 80 tons of gold, which represents only 5% of Tether’s $112 billion reserve portfolio, as per the company’s March attestation. Ardoino emphasized the security of the vault, declining to disclose its exact location due to security concerns.

Tether's gold reserves are significant, matching the total precious metals and commodities exposure of the UBS Group. The move to accumulate gold is seen as a strategic pivot to reduce exposure to fiat currencies and regulatory risks. Ardoino highlighted gold's safe-haven status, noting that it is a safer asset than any national currency. He suggested that concerns over increasing U.S. debt could drive investors to seek alternatives, including gold. This sentiment is echoed by the recent surge in gold prices, fueled by central bank buying and renewed interest in gold ETFs.

Tether's decision to own its own gold vault is driven by the high costs associated with using third-party vault operators. Ardoino pointed out that the fees charged by these operators can be substantial, especially if the gold token were to grow significantly in circulation. By owning its own vault, Tether can reduce these custody costs, making it more cost-effective to manage its gold reserves. This strategy aligns with Tether's broader efforts to enhance its financial stability and security, ensuring that its stablecoin remains a reliable asset in the volatile cryptocurrency market.