Stablecoin giant Tether poaches senior precious metals trading manager from HSBC US, aiming to challenge Financial Institutions, Inc.'s dominant position in the gold market.

Stablecoin giant Tether Holdings SA is accelerating its expansion into the physical gold market. According to sources, the company is poaching two of the most senior precious metals trading executives globally from HSBC HOLDINGS (HSBC.US), with plans to use substantial funds to build a large gold reserve and challenge the dominant position of traditional Financial Institutions, Inc. in the gold market. According to sources, Vincent Domien, global head of metals trading at HSBC, will join Tether in the coming months, alongside Matthew O'Neill, who is in charge of the bank's precious metals business in Europe, the Middle East, and Africa. Both individuals are currently serving their notice periods. Domien is currently a board member of the London Bullion Market Association (LBMA) and joined HSBC from a French Industrial Bank in 2019, before being promoted to Global Head of Metals Trading in 2022. O'Neill has been with HSBC since 2008. This personnel change is undoubtedly a blow to HSBC's precious metals division. As the price of gold hits consecutive new highs and is expected to have its best year since 1979, trading companies, hedge funds, and banks are expanding their precious metals teams, making competition for talent in the industry increasingly fierce. An HSBC spokesperson declined to comment on the matter. Tether has been rapidly expanding in the precious metals field in recent years. According to the latest reserve report released in September, Tether holds gold valued at over $12 billion, with an average weekly increase of over one ton of gold over the past year. According to media estimates, this makes Tether one of the largest gold buyers globally, second only to central banks and some national reserve institutions. In addition to reserves to support its US dollar stablecoin USDT, Tether also issues Tether Gold, a stablecoin backed by physical gold. Currently, the circulation of Tether Gold is around $2 billion, fully backed by approximately 1,300 gold bars. The company is also expanding its presence in other parts of the gold supply chain through investments in gold mining licenses and other means. As the issuer of stablecoins, Tether's assets mainly include US Treasury bonds, gold, and other low-risk investments. Thanks to high-yield reserve assets and the surge in gold prices, the company recorded approximately $13 billion in profit in 2024, comparable to large Wall Street investment banks, with expected profits to rise to $15 billion this year. Gold's strong rise this year has been driven by continued purchases by global central banks, momentum trading, and so-called "currency devaluation trading," where investors hedge against declining sovereign debt and fiat currency values by turning to precious metals. Tether's proactive expansion in this environment signifies a move towards physical assets in the crypto financial sector, transitioning from virtual assets to physical asset backing in a new phase.