Tether’s CEO, Paolo Ardoino, in an interview, revealed that they hold $8 billion worth of gold in their secretive Swiss vault. He said the decision was driven by the costs associated with maintaining a traditional vault operator in the industry. They prefer to manage their storage internally, avoiding third parties.
“If you have your own vault, eventually, with the size, it gets much cheaper,” he said.
According to Bloomberg, Tether is now positioned as one of the largest gold holders globally, drawing comparison with the total value of metals and other commodities held by UBS Group, the largest investment bank based in Switzerland.
Gold as a hedge
The firm’s financial report stated that precious metals now account for nearly 5% of the company’s reserves. The company also generates revenue from exchanging dollars for USDT (stablecoin) tokens and from its investments in the US treasury. They have also introduced XAUt, a gold-backed token, with each token backed by one ounce of gold.
According to Ardoino, Gold seems to be a safer asset against national currencies due to the potential fiat instability, as the concerns about the US debt levels are increasing. With these concerns rising, even central banks within the BRICS nations are piling up their gold, leading to the rising price of precious metal, he speculates.
The strategic shift
Tether is doubling down on its strategy by investing in physical infrastructures and hedging with hard assets while adapting to rely less on the traditional financial systems.
