Tether explores gold mining, trading, and commodity finance to diversify crypto holdings and strengthen stablecoin-backed physical assets.
Tether, the issuer behind the world’s largest stablecoin USDT, is moving deeper into the gold industry. The company has a variety of investments, including gold mining, refining, trading, and royalties. This represents a strategic move towards diversifying its reserves and establishing a closer connection between blockchain technology and tangible assets.
Tether Backs XAUT with $8.7B in Gold Reserves
Tether’s increasing engagement with gold is a testament to its commitment to offering stable and secure financial solutions for investors. The company already has gold worth about $8.7 billion sitting in security vaults in Zurich. This gold helps support Tether’s gold-backed stablecoin called XAUT, which gives investors gold exposure without the need to deal with physical bars of bullion.
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Apart from its holdings, Tether has started investing in equity towards the gold sector. In June, it took on a controlling stake valued at $105 million in Canadian gold royalty company Elemental Altus. The company later added to that investment by buying another $100 million of stock.
Tether CEO Paolo Ardoino has expressed strong confidence in gold as a sound asset. He has said that gold is far safer than most national currencies and believes it is a useful adjunct to Bitcoin. Ardoino’s view is that the combination of digital currencies and physical assets such as gold could lead to a more stable and trusted financial system. This conviction drives Tether’s approach of investing in gold-related companies, while still dominating in the crypto arena.
In addition, Tether is reportedly looking at other gold mining and royalty companies to extend its investments. One of the companies approached was terranova resources, but no deal is finished so far. These discussions suggest that Tether is not restricting itself to a single investment, but is open to a wide presence in the space. The company’s moves are part of a long-term strategy to support digital assets with physical assets.
Tether Links Gold Mining Investments to New Commodity Finance Ventures
Apart from gold, Tether has also moved into the commodity trade finance business. It now provides finance on a short-term basis for the shipment of raw materials and has developed a trading book of billions. This step is a crucial step towards further mainstreaming Tether’s stablecoins and expanding their real-world utility. By catering to trade and commodities, the company diversifies away from the crypto industry.
Tether’s foray into the world of gold and commodities is a testament to a changing landscape in the stablecoin market. While many digital currency projects are entirely based on blockchain technology, Tether is basing its financial offerings on physical assets. Its own gold-backed token, XAUT, already reflects such an approach, and the company’s growing gold holdings underscore its serious commitment to bridging the two worlds. This approach provides investors with more secure and stable options during a time of economic uncertainty.
In conclusion, Tether’s gold strategy is part of its overall mission to create trust in digital finance. By pairing the speed of blockchain with the durability of gold, Tether seeks to create a more robust and diversified ecosystem. As the company continues to expand, its blend of crypto and physical assets may help shape the future of finance in powerful and lasting ways.
