- Tether holds about 80 tons of gold valued at $8 billion in a Swiss vault
- Gold represents nearly 5 % of its $112 billion reserve portfolio
- New US and EU rules could force Tether to convert gold backing USDT into cash or equivalents
The revelation by Tether CEO Paolo Ardoino on July 7 that the company holds approximately $8 billion in gold stored in a Swiss vault has drawn attention to the stablecoin issuer’s broader reserve management strategy. During an interview with Bloomberg News, Ardoino emphasized that the vault, which contains nearly the entire 80-ton stockpile, is “the most secure vault in the world.” This disclosure underscores Tether’s position as one of the largest private gold holders globally and highlights the firm’s approach to combining traditional bullion economics with on-chain settlement.
Tether $8 Billion Gold Custody in Switzerland
Tether maintains close to 80 tons of gold in a single Swiss facility, equating to roughly $8 billion based on current spot prices. According to a March attestation, gold comprises nearly 5 percent of Tether’s total $112 billion reserve portfolio. The decision to self-custody bullion rather than rely on commercial vault operators allows Tether to avoid fees of about 50 basis points, preserving more of the asset’s yield potential. This structure places the El Salvador-based issuer among a small group of private entities that own such a substantial amount of physical gold outright.
Private Gold Holdings and Reserve Allocation
Detailed attestations indicate that the gold holdings mirror the value of the precious metals book at UBS Group AG, one of the few bullion-dealing banks to disclose that figure publicly. Tether’s reserve mix extends beyond gold to include cash equivalents, short-term Treasurys, and other near-cash instruments. With a market capitalization for USDT reaching $159 billion in June and nearly $5 billion in monthly growth, the firm’s diversification into bullion serves both as a hedge against fiat devaluation and as a means to reinforce trust among token holders. By holding the metal directly, Tether can scale its gold program without incurring proportionally higher custody costs.
Regulatory Pressures on Tether and Stablecoin Collateral
Emerging regulations on both sides of the Atlantic threaten to reshape collateral requirements for fiat-referenced stablecoins. Draft legislation in the United States, such as the GENIUS Act, and Europe’s Markets in Crypto-Assets (MiCA) framework restrict issuers to cash and near-cash instruments, explicitly excluding commodities like gold. If those rules take effect and Tether pursues licenses under these regimes, the company would be required to liquidate its bullion reserves backing USDT. However, metal allocated to its gold-backed token, XAUT, could remain intact. Notably, MiCA granted licenses to 53 crypto firms in its first six months but did not include Tether, underscoring the uncertainty of future approvals.
Tether Bullion-Linked Token XAUT and Market Performance
The separate token XAUT, directly convertible into vaulted bars, circulates against 7.7 tons of gold valued at approximately $819 million. While this figure is modest compared to the 950 ton capacity of major exchange-traded gold funds, it provides sufficient backing to facilitate on-chain redemptions at the Swiss vault. The existence of XAUT allows investors to hold a token tied strictly to gold, separate from USDT’s broader reserve portfolio. CEO Ardoino has suggested that increased demand may arise if confidence in US fiscal policy wanes, positioning XAUT as an on-chain alternative to bank deposits.
Economic Rationale for Gold Strategy
Gold has climbed roughly 25 percent in 2025 amid tariff-driven trade tensions and broader geopolitical uncertainty. Ardoino noted that every central bank within the BRICS nations is purchasing gold, a trend he believes has contributed to the metal’s recent price surge. By combining physical custody of bullion with yield generation on U.S. Treasurys, Tether captures traditional benefits of gold ownership—such as inflation protection—while leveraging blockchain technology for liquidity and settlement efficiency. The dual-token approach, with USDT and XAUT, allows the firm to balance liquidity needs against the desire to offer investors exposure to precious metals without relying on bank-deposit infrastructure.
Conclusion
Tether’s announcement of an $8 billion gold reserve in a Swiss vault highlights a deliberate strategy to diversify reserves and reduce custody costs. With gold accounting for nearly 5 percent of a $112 billion portfolio and separate bullion-backed tokens circulating, the firm bridges conventional asset management and blockchain innovation. Regulatory developments in major markets will determine whether this metal-centric model endures or requires adaptation, but for now, Tether’s dual use of cash-like instruments and gold provides a unique framework for stablecoin collateralization.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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