Stablecoin leader Tether hoards 80 tons of gold in Switzerland, stating that "gold is safer than national currencies."

Global stablecoin issuer Tether Holdings SA recently announced that it has established and owns its own gold vault in Switzerland, used to store approximately $8 billion worth of gold reserves, and plans to expand these reserves, emphasizing that gold is logically "safer than any sovereign currency." The cryptocurrency company, headquartered in El Salvador, stated that it currently holds close to 80 tons of gold. The majority of this gold is directly owned by Tether, the issuer of the stablecoin Tether, making it one of the largest gold holders globally outside of major banks and sovereign nations. It is reported that the company's gold reserves are roughly equivalent in value to the total value of precious metals and other commodities held by UBS Group AG, accounting for nearly 5% of the company's overall reserves. "We have our own gold vault. I believe it is the safest vault in the world," said Tether CEO Paolo Ardoino in an interview. The gold storage facility is located in Switzerland, but the company declined to disclose the specific location or the time when the gold reserves were established for security reasons. Tether is the issuer of the largest global stablecoin Tether (USDT), which aims to maintain a one-to-one value with the US dollar, with a current circulating supply of approximately $159 billion. The company issues tokens in exchange for dollars and profits by investing in assets such as short-term US government bonds using these reserves as collateral. According to the company's latest report released in March, precious metals account for nearly 5% of its overall reserve value. The approximately $8 billion worth of gold in Tether's vault is roughly equivalent to the total value of precious metals and other commodities held by UBS Group AG, one of the few major gold trading banks that disclose such information in quarterly reports. The explosive growth of stablecoin issuance has raised concerns among regulatory agencies and law enforcement, with Tether being particularly scrutinized due to its large scale and past market doubts about its reserve status. One of the major concerns is that with the proliferation of stablecoins, they may allow large sums of money to bypass the formal banking system, posing a significant threat to the global payment security system. Stablecoins are a type of digital currency that maintains a stable value ratio by anchoring core reserve assets such as the US dollar, euro, gold, etc. With key legislation on stablecoin regulation accelerating in the US Congress, these price-stable cryptocurrencies are beginning to enter the mainstream asset realm of the global financial market. Stablecoins are essentially "on-chain dollars," with high liquidity US assets (cash, short-term US Treasury bonds) being used as underlying collateral in a 1:1 ratio. By combining the "dollar" with "blockchain," stablecoins provide a new type of payment medium that is both stable and efficient, allowing the capital market to see the business potential of "digital dollarization." In the past, stablecoins were mainly used as channels for traders to transfer funds in and out of other cryptocurrencies. However, an increasing number of cryptocurrency investors are optimistic that with Trump's strong support for cryptocurrency development, stablecoins may soon play a more important role in the global business and trading systems, especially as stable payment tools for cross-border transactions. New stablecoin regulations introduced in recent years generally exclude gold and other alternative assets as suitable backing for digital dollars. Regulations introduced by the EU last year, as well as proposed stablecoin legislation in the US, only allow sovereign cash and cash equivalents (such as short-term government bonds) as backing assets for stablecoins pegged to fiat currency. If Tether wishes to obtain legal authorization in these markets, according to the above rules, it would be required to sell gold used to support USDT. In addition to USDT, the company also issues a gold-backed token called XAUT, with each token backed by one ounce of gold in a one-to-one ratio. These tokens can be exchanged for physical gold, directly collected in Switzerland. The XAUT tokens issued by the company are equivalent to 7.7 tons of gold or $819 million in value, still significantly smaller in scale than gold ETFs, which have stronger liquidity. The largest gold ETF holds nearly 950 tons of gold. "I believe gold should be safer than any sovereign-level currency logically," Ardoino said in an interview. "So ultimately, if people start worrying that US debt might rise, they may look for alternative options, and gold is one of the best choices." Since the beginning of this year, gold prices have risen by approximately 25% as investors seek to hedge against geopolitical tensions and expanding trade wars. Strong buying demand from central banks and sovereign institutions has also supported the price of gold. "Central banks from every BRIC country are buying gold," Ardoino said. "In our view, that is the reason for the rise in gold prices." He stated that the company decided to have its own gold vault rather than using gold vault operators commonly used in the precious metals industry due to cost considerations. If the actual circulating size of Tether's gold tokens reaches $100 billion, "paying 50 basis points in fees would be a lot of money," he said in the interview. "If you have your own gold vault, as the scale expands, the cost of gold custody will eventually be much cheaper."