Tether Secures Swiss Vault for $8 Billion Gold Reserve

Tether, the issuer of the world's largest stablecoin, has secured a Swiss vault to store an $8 billion gold reserve. This strategic move positions Tether as one of the largest private gold holders globally, with nearly 80 tons of gold in its possession. The vault, described by Tether CEO Paolo Ardoino as "the most secure vault in the world," is a significant step in enhancing the stability and trustworthiness of Tether's USDT stablecoin.

The gold reserve, which represents nearly 5% of Tether’s $112 billion reserve portfolio, is a substantial component of the company's asset backing. This move aligns with Tether's strategy to diversify its reserves and provide additional security for its users. By self-custodying the bullion, Tether aims to avoid the higher fees associated with commercial vault operators, which typically charge around 50 basis points.

Tether's decision to diversify its reserves into gold is part of a broader strategy to mitigate risks and enhance the stability of its stablecoin. This move comes at a time when central banks around the world are increasingly turning to gold as a hedge against economic uncertainties. Ardoino highlighted the alignment with trends observed in central banks' gold purchases, noting that every single central bank in the BRICS countries is buying gold.

However, Tether faces regulatory challenges in key markets. Draft bills and regulatory frameworks in the US and Europe restrict the use of commodities like gold to collateralize fiat-referenced stablecoins, allowing only cash or near-cash instruments. If these regulations are enforced, Tether may need to liquidate the bullion backing USDT to obtain licenses in those jurisdictions.

Despite these regulatory hurdles, Tether's gold-backed token, XAUT, circulates against 7.7 tons of gold, worth approximately $819 million. This amount, while smaller than the 950-ton giant among exchange-traded gold funds, is substantial enough to facilitate redemptions at vault doors in Switzerland. Ardoino suggests that demand for XAUT could increase if investors lose confidence in US fiscal sustainability and seek alternatives that avoid bank-deposit risk while remaining on-chain.

The market context for bullion-linked tokens is favorable, with spot gold advancing by roughly 25% in 2025. This increase is driven by traders hedging against tariff-driven trade friction and wider geopolitical tensions. Ardoino attributes the rise in gold prices to the BRICS countries' central banks actively purchasing gold. Tether's strategy of holding gold, earning yield on Treasurys, and maintaining a separate token directly convertible into vaulted bars combines traditional bullion economics with blockchain settlement.

Tether must still convince regulators that a metal-heavy reserve would not impede USDT’s liquidity under stress. For now, the firm holds the metal, earns yield on Treasurys, and keeps a separate token directly convertible into vaulted bars, combining traditional bullion economics with blockchain settlement. This approach aims to provide a stable and secure backing for USDT, enhancing its appeal to investors seeking a reliable store of value.