Tether builds its own vault in Switzerland, holding $8 billion in gold reserves.

According to Bloomberg, the world's largest stablecoin issuer Tether Holdings SA announced that it has established a dedicated vault in Switzerland for storing $8 billion worth of gold reserves, with plans for continuous accumulation. The Salvador-based Crypto Assets company stated that it currently holds nearly 80 tons of physical gold. The vast majority of which is directly owned by Tether, making it one of the largest gold-holding entities globally, aside from banks and nations.

Self-built vaults highlight security and cost advantages

Tether CEO Paolo Ardoino emphasized in an interview: "We have our own vault, and I believe it is the safest vault in the world." For security reasons, the company did not disclose the specific location and establishment time of the vault located in Switzerland. Ardoino explained that the choice to build their own vault instead of renting an industry-standard custody facility was mainly due to cost considerations. He pointed out that if the circulation of their gold-backed tokens grows to $100 billion, "paying a 50 basis point custody fee would be a huge expense," and "having our own vault will significantly reduce custody costs as we scale up."

Gold reserves scale benchmarked against traditional banking giants

According to the latest reserve report released by Tether in March this year, precious metals (mainly gold) account for nearly 5% of its total reserves. The $8 billion worth of gold it holds is comparable to the total value of all precious metals and commodity holdings disclosed by UBS Group AG in its quarterly financial report. UBS is one of the few major gold trading banks that publicly disclose such information.

New Regulations on Stablecoin Bring Compliance Challenges

The explosive growth of stablecoins has attracted significant attention from regulators and law enforcement agencies, with Tether facing special scrutiny due to its massive scale and past questions about its reserve status. One of the main concerns is that as stablecoins become more popular, a large amount of funds may bypass traditional banking systems. The new stablecoin regulatory frameworks implemented by the EU last year and proposed in the US typically exclude alternative assets such as gold from qualifying reserve assets that support fiat-pegged stablecoins, allowing only cash and cash equivalents like short-term government bonds as support. If Tether seeks authorization in these markets, it may need to sell the gold reserves backing USDT according to the new regulations.

XAUT: A Token Option Backed by Physical Gold

In addition to the USDT stablecoin pegged to the US dollar (which currently has a circulation of 159 billion USD), Tether has also issued the gold-backed token XAUT. Each XAUT token is backed by one ounce of physical gold on a one-to-one basis. Holders can directly redeem physical gold in Switzerland. Currently, the XAUT tokens issued by Tether correspond to approximately 7.7 tons of gold (valued at 819 million USD). Compared to the more liquid gold ETFs (which have the largest holdings of nearly 950 tons), the scale of XAUT is still relatively small.

Gold: The Ultimate Hedge Asset Against Fiat Currency Risk?

Ardoino believes that "gold should logically be safer than any national fiat currency." He expects that "if people start to worry about the potential growth of U.S. debt, they may look for alternative assets." Since the beginning of this year, amid increased geopolitical tensions and trade frictions, the demand for gold as a safe-haven asset has surged, and the price has risen by about 25%. Ardoino points out that "each central bank in the BRICS countries is purchasing gold reserves, and we believe this is the reason for the rise in gold prices." This further strengthens the hedging value of gold in the crypto assets portfolio.

DeFiLlama data shows that the current market value of stablecoins is $255.49 billion, of which the market value of USDT reaches $159.521 billion, accounting for 62.44%.