Tether Secures 80 Tons of Gold in Swiss Vault, Valued at $8 Billion

Tether, the world’s largest stablecoin issuer, has recently announced that it holds nearly 80 tons of gold, valued at approximately $8 billion, in a highly secure vault located in Switzerland. This move has been seen by some as a significant step in Tether’s asset strategy, demonstrating the company’s financial strength and commitment to backing its stablecoins with physical assets.

Tether CEO Paolo Ardoino confirmed in an interview that the company has secured its gold holdings in what he described as “the most secure vault in the world.” The exact location of the vault remains undisclosed for security reasons, but it is clear that Tether views this as a symbol of its financial robustness. The company has built and operates its own gold vault in Switzerland, which not only lowers custody costs but also allows for the expansion of its reserves.

Ardoino highlighted that gold is considered a safer asset compared to any national currency, especially in the context of global inflation and debt concerns. The value of gold has surged significantly over the past year, reaching an all-time high of $3,390 per ounce in April. At the time of writing, gold is still trading at a high around $3,289, reflecting strong investor interest. This surge has prompted many institutions, including central banks across various nations, to increase their gold holdings.

Tether’s gold holdings are not merely an investment but serve as a reserve backing its Tether Gold (XAUT) token. This stablecoin has a market cap of over $811 million and is one of the leading players among commodity-backed tokens. Earlier this year, Tether reported holding 7.7 tons of gold in its Q1 financial statement. The recent consolidation into a single Swiss vault indicates an increase of about 0.3 tons since then. By housing the entire reserve in one facility, Tether aims to reduce custodial costs and streamline management. Ardoino noted that having their own vault is more financially sensible than relying on third-party vault operators, as the costs decrease with scale.

Tether’s gold reserve is notable for its size, placing the company among the largest non-sovereign holders of gold in the world. This status brings prestige but also raises questions about the backing of USDT, Tether’s main product. Despite the impressive $8 billion gold stash, it represents less than 5% of Tether’s total reserves. According to its latest quarterly report, the bulk of Tether’s reserves lie in US Treasury bonds, estimated to be around $98 billion as of Q1. Other reserves likely include corporate debt, cash, and digital assets, making the gold reserve relatively insignificant compared to the total assets meant to back Tether’s stablecoins.

Critics argue that this announcement may distract investors from more pressing concerns, such as the lack of a full audit of Tether’s reserves. While the $8 billion vault is a symbol of strength, it does not address the transparency issues surrounding the remaining 95% of Tether’s reserves. Until Tether opens its books fully, questions about the backing of its stablecoins will continue to shadow its growth, especially in an industry where transparency is highly valued.