Tether, the world’s largest stablecoin issuer, is expanding aggressively into the gold industry. Beyond running its gold-backed stablecoin XAUt, the company has opened talks with gold mining and investment groups and has already acquired a 38% stake in gold royalty company Elemental Altus Royalties Corp., with the option to increase its ownership above 50%, according to a Financial Times report .
The company is exploring further deals across gold mining, refining, trading, and royalties. CEO Paolo Ardoino has long praised gold as a safer, more reliable asset than national currencies, going so far as to call it “natural Bitcoin.”
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Tether currently holds $8.7 billion worth of gold reserves in a Zurich vault and reported $4.9 billion in second-quarter profits, fueled by rising Bitcoin and gold prices.
Crypto Implications: a New Stablecoin Frontier?
The move signals Tether’s shift from being just a stablecoin issuer to becoming a player in the global commodities market. The impact can be viewed in two ways, optimistically and realistically.
From the optimistic perspective, Tether’s gold investments could set the stage for a new kind of stablecoin, backed not just by physical bullion but, in theory, by cash flows from royalty assets.
While XAUt today is only tied to vaulted gold, if Tether were to channel income from its royalty stakes into the token’s structure, it could evolve into the first gold-backed stablecoin with yield potential, positioning it as a possible alternative to fiat-pegged coins.
Skeptical View: Risks and Limitations
From a more skeptical angle, the strategy may look like diversification but could be more symbolic than transformative. Tether’s dominance still rests on USDT. Just hours ago, the company minted another $2 billion worth of USDT, adding to its already massive $168 billion market cap. XAUt, meanwhile, remains a niche product with limited traction compared to dollar-backed stablecoins.
Expanding into gold mining and royalties also pushes Tether into industries far outside its expertise. Commodity businesses are capital-intensive, politically sensitive, and vulnerable to price cycles, raising the risk that Tether’s capital could become tied up in illiquid or underperforming assets.
On the Flipside
- U.S. and EU regulators are already closely monitoring Tether. Moving into commodities could invite even more scrutiny, not only from financial watchdogs but also from mining and trade regulators.
Why This Matters
Tether’s gold investments might be less about innovation and more about optics: projecting stability at a time when stablecoins face mounting regulatory pressure.
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People Also Ask:
XAUt is Tether’s gold-backed stablecoin, where each token is backed by physical gold held in secure vaults. It allows investors to hold and transfer gold digitally on blockchain networks.
While USDT is pegged to the U.S. dollar, XAUt is backed by physical gold. This gives XAUt a tangible asset base and positions it as a potential hedge against fiat currency risk.
No. Today, XAUt is only backed by gold stored in vaults and does not produce yield. Any future income from Tether’s gold investments is not linked to token holders.
XAUt represents a bridge between traditional assets (gold) and digital finance, giving investors a stable, asset-backed alternative to fiat-pegged stablecoins like USDT.
