Tether started as a simpler issuer of dollar-pegged cryptocurrency (stablecoins). About a decade later, it has quietly become one of the largest private hoarders of the world’s most valuable asset: gold.
By late 2025, Tether’s bullion stash is worth over $15bn, putting it in the same league as small central banks. While Tether’s flagship dollar-pegged USDT has boosted its market cap 32% this year, its gold-pegged coin (XAUT) has surged more than 235%, according to Coin Metrics data, as of 28 Nov.
Gold rush
Explorers once crossed oceans for gold. Empires fought over it. For centuries, the precious metal has been a reliable store of value around the globe, even amid periods of geopolitical crisis and extreme stress in financial markets. It acts as a safe haven for investors to park their capital when all else seems to fail.
This year has witnessed a remarkable convergence with risky assets such as equities. As of 28 Nov, gold was up 60% year-to-date, after touching highs of about $4,300 per troy ounce in late October.
Deutsche Bank even recently upgraded its 2026 forecast from $4,000 per ounce to $4,450, suggesting the German lender believes bullion still has room to grow next year.
Meanwhile, the S&P 500 index of stocks is up about 16%, while US Treasuries – the classic “risk-off” asset – are paying annual coupons in the low- to mid-single-digit range, offering pennies on the dollar compared with more risky assets, with no upside potential.
Who’s buying all this gold?
Central banks have been aggressively adding to their gold holdings to expand and diversify their strategic reserves, often at the expense of US dollars. In 2024, demand from central banks and other official institutions was 81% higher than a decade earlier, according to World Gold Council data. By the third quarter of 2025, investment demand for gold had already surpassed any full year since the COVID period.
Dollar vs gold share of central bank reserves. Source: Deutsche Bank Research
The US dollar’s share of global central bank reserves has fallen from about 60% to roughly 41% since the start of this century. Over the same period, gold’s share has more than doubled and now accounts for more than a quarter of reserves.
Demand for bullion in the first three quarters of 2025 was 10% higher than in the same period a year earlier. Since the beginning of 2022, central bank and institutional demand has averaged 254 tonnes per quarter – 115% above the average from 2010 to 2021.
From digital dollars to digital gold
Tether’s USDT flagship tracks the US dollar and has a market capitalization of around $185bn. That puts it in the same valuation bracket as giant companies such as Disney, Airbus or Citigroup, and among the 100 largest assets in the world by market cap.
Other stablecoins include Circle’s USDC ($76bn market cap), Ethena’s USDe ($7bn), and DAI ($5bn). Even PayPal (PYUSD) and Trump-backed World Liberty Financial (USD1) have launched their own dollar tokens. USDT, however, remains the dominant liquidity layer of crypto markets.
Tether, which moved its headquarters from the British Virgin Islands to El Salvador earlier this year, mints new USDT almost exclusively in exchange for fiat currency – usually dollars, but also euros, yuan, and others. To keep the peg, it holds a mix of cash and liquid securities, mainly short-term US Treasuries. The cash sits on its audited reserves; the Treasuries, meanwhile, pay interest.
At current rates, a 3-month US Treasury bill yields about 3.8%, according to FRED. Longer-dated notes such as 10-year and 20-year bonds yield slightly more, though they are less liquid. In a recent quarterly report, Tether said roughly two-thirds of its assets were in US Treasuries, including $57bn of T-bills with an average remaining maturity of under 90 days.
In its Q3 earnings report, the company said year-to-date profits were already above $10bn, putting it on track to match last year’s full-year profit of around $13bn. Tether’s total assets grew 44% between Q3 2024 and Q3 2025 as demand for dollar liquidity in crypto has surged.
USDT’s market cap has climbed from less than $5bn in early 2020 to today’s roughly $185bn level, while XAUT’s fully diluted market cap has jumped from a tiny $6mn base in 2020 to around $2.2bn by late 2025.
Not everyone is impressed by the issuer’s strategy: “What happens to Tether if Gold starts falling?” tweeted Andreas Steno Larsen, founder of macroeconomic research firm Steno Research, in November. “How can you back a stable coin with something that is by definition not stable (versus USD)? A very slippery slope imho.”
How Tether Gold took off
Tether introduced Tether Gold (XAUT) in Jan 2020. Each XAUT token represents one troy ounce of physical gold held in a Swiss vault. As of 28 Nov, XAUT is the 48th-largest cryptocurrency, with a market cap of about $2.2bn ($1.6bn circulating), according to CoinMarketCap.
The company’s physical gold reserves have risen sharply. Tether recently reported gold bars held in Switzerland worth $12.9bn. Using a gold price of $3,858 per troy ounce on 30 Sep (the date of the holdings), that works out to around 104.16 metric tonnes – enough to place Tether roughly 35th in the world if it were a central bank, similar to South Korea’s holdings, and making it the largest non-sovereign holder of the metal.
On top of that, Tether Holdings – the entity that manages Tether Gold and the assets behind it – reported in its Q3 reserve report that 11.68 metric tonnes of gold back XAUT directly. Taken together, that is just under 116 metric tonnes of bullion, a roughly 64% increase since the start of the year.
Owning the value chain
Tether has also been quietly buying into the gold value chain itself.
The Financial Times reported in September that Tether had been in talks with mining and investment groups about deploying capital across the entire gold pipeline, from mining and refining to trading and royalty companies.
In June, Tether acquired a 31.9% stake in Canadian gold royalty firm Elemental Altus Royalties for roughly $89mn. Rather than operating mines, Elemental finances projects in exchange for a slice of future production, giving investors exposure to gold revenues with less direct operating risk.
In September, as Elemental merged with EMX Royalty, Tether subscribed to an additional $100mn of new Elemental shares, deepening its exposure to the royalty business.
Elemental has a diverse portfolio with royalties on producing and near-producing mines, plus a pipeline of development and exploration assets. More than three-quarters of its revenue is tied to gold-producing mines, it has said.
“Tether’s growing investments in gold and Bitcoin reflect our forward-looking strategy to build a more resilient and transparent financial system,” Paolo Ardoino, Tether’s chief executive, said when the deal was announced. “By gaining exposure to a diversified portfolio of gold royalties through Elemental, we are strengthening the backing of our ecosystem while advancing Tether Gold and future commodity-backed digital assets.”
Gold, bitcoin, and reserves
Ardoino has said that both gold and Bitcoin will “outlast any other currency.” His company now holds billions of dollars’ worth of both, on top of its enormous hoard of US Treasuries.
Bitcoin is also creeping onto central bankers’ radar. In an October research report, Deutsche Bank wrote that both Bitcoin and gold are likely to feature on central bank balance sheets by 2030. Ardoino frames it this way: “People say bitcoin is ‘digital gold’. I prefer to think in bitcoin terms – gold is our source of nature.”
For Tether, this positioning is very convenient. Gold and Bitcoin both have strong store-of-value narratives, both have limited supply, and both sit somewhat outside the traditional banking system. If central banks and institutions are rebuilding reserves around those two assets, Tether can sit on a hefty pile of each. (The company reported roughly $10bn of Bitcoin on its balance sheet as of 30 Sep).
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