Tether Holdings SA, the world’s largest publisher of Stablecoin USDT, stocks around 80 tons of gold (valued by $8 billion) in a secret Swiss safe.
According to information provided by the company’s CEO, Paolo Ardoino, the safe belongs entirely to Tether and is known as the “World’s Safe.” However, for security reasons, the exact location of the vault and when it is established is not disclosed.
Tether, a Salvador-based cryptocurrency company, generates revenue by investing dollars it collects in exchange for issuing USDT tokens. These investments include assets such as the US Treasury and precious metals. Precious metals account for around 5% of the reserves, according to the company’s latest report released in March.
Tether’s gold reserves are roughly the same size as precious metals held by some major banks, such as Switzerland-based UBS Group AG, making them one of the non-bank and government gold holders.
But the rapid growth of stubcoin continues to be a concern for regulators and law enforcement agencies. Tether has previously been criticized for the validity of its preparation. Rules enacted in the European Union last year and proposed in the US require that they be supported only by “cash-like” assets, such as cash and short-term government bonds. If such regulations are in place, tethers may be needed to sell the gold they hold to retreat the USDT.
In addition to USDT, Tether also issues a gold-backed token, Xaut. Each Xaut token is backed 1:1 with 1 ounce of gold, which is physically stored in Switzerland. The company has issued approximately $819 million worth of Xaut tokens so far, equivalent to 7.7 tons of gold. However, this figure is war-fed by 950 tons of gold held by a major exchange sales fund (ETF).
CEO Ardoino said “Gold should be a safer asset than any other country,” adding that rising US debt levels could lead investors to alternative assets. He also turned his attention to the aggressive gold purchases of central banks of BRICS countries.
*This is not investment advice.