Buying gold more than central banks, the gold dream of the stablecoin king Tether

Article by: Liam, Deep Tide TechFlow

In 2025, global central banks are unleashing an unprecedented gold-buying wave.

Central banks from China, India, Poland, Turkey, and other countries purchased over 1,100 tons of gold in the past year, setting a new record since the collapse of the Bretton Woods system.

However, amid this gold return craze, a “non-sovereign” buyer is quietly emerging—the parent company of USDT, the king of stablecoins, Tether.

According to Bloomberg, Tether has become one of the world’s largest gold buyers. Its latest reserve report shows that as of September 2025, the company’s gold holdings exceed $12.9 billion, surpassing several central banks such as Australia, the Czech Republic, and Denmark, ranking in the top 30 globally.

Even more astonishing is its rate of gold accumulation. Over the past year until September, Tether has been adding more than 1 ton of gold weekly, ranking third among global central banks, behind only Kazakhstan and Brazil, even surpassing Turkey and China’s central banks.

This figure does not include the gold reserves backing its gold stablecoin (XAU₮) or the billions of dollars in private gold investments made with profits.

Tether is buying not paper gold or ETFs, but real gold bars.

Unlike most central banks that store gold at the Bank of England or the New York Fed, Tether chooses to build its own vaults and self-custody. CEO Paolo Ardoino revealed in an interview that Tether has constructed “one of the safest vaults in the world” in Switzerland but refused to disclose its exact location.

Deep Tide TechFlow learned that Tether is also building a second vault in Singapore to serve its Asian reserve operations and the expansion of its gold stablecoin XAU₮.

A crypto company is replicating the infrastructure of central banks—building its own vaults and a global distributed reserve system.

Recently, Tether took a more ambitious step by directly recruiting talent into the core of the gold market.

Bloomberg reports that Tether has lured two top global precious metals traders from HSBC with high salaries: Vincent Domien, Head of Global Metals Trading, and Mathew O’Neill, Head of EMEA Precious Metals Financing. Both are currently serving notice periods and are expected to join within a few months.

Domien also serves as a director of the London Bullion Market Association (LBMA), the de facto standard-setter for the global gold market. O’Neill has been with HSBC since 2008 and is a key figure in European precious metals financing.

A closer look reveals that Tether’s ambitions go beyond simply buying gold.

From bars to mines, covering the entire industry chain

If self-building vaults and stockpiling physical gold are Tether’s first steps toward aligning with central banks on the “asset side,” its real ambition in gold goes far beyond being a passive buyer. It aims to integrate the entire gold industry chain into its financial ecosystem.

This ecosystem can be roughly divided into three layers: the bottom layer is gold mines and licenses; the middle layer is gold bars; and the top layer is tokenized on-chain gold.

First, the most familiar: XAUT, the gold-backed token embedded in smart contracts. Tether Gold (XAU₮) is a gold token issued by Tether, with each token representing one ounce of physical gold stored in Swiss vaults and meeting LBMA’s “Good Delivery” standards.

The latest disclosed data shows that XAU₮ is backed by approximately 370,000 ounces of physical gold, over 11 tons, all stored in Swiss vaults. Driven by rising gold prices, the circulating market cap of XAU₮ has surpassed $2.1 billion.

This means Tether has two layers of gold exposure:

One is the gold reserve on its balance sheet, which can also enhance the credibility and resilience of USDT;

The other is the reserve backing XAU₮, transforming physical gold into a tradable financial product on the blockchain.

For example, Tether launched the open finance platform Alloy by Tether, allowing users to use XAUT as collateral to mint new synthetic USD stablecoins like aUSDT.

But Tether is not content with this. It aims to go further in the gold industry chain by directly investing in upstream gold licenses, incorporating future gold production into its asset system.

In June 2025, Tether’s investment arm, Tether Investments, announced acquiring a stake in Canadian-listed Elemental Altus Royalties, a company focused on gold and precious metals royalties and streams, with multiple producing or near-producing mines.

Public information shows that through agreements and increased holdings, Tether could hold over one-third of Elemental Altus, becoming a cornerstone shareholder. It also supported a subsequent merger with EMX Royalty, injecting about $100 million to help build a mid-sized gold royalty platform.

Tether is not only buying existing gold bars but also acquiring future production rights from underground mines.

Its ambitions extend beyond individual assets. According to the Financial Times, Tether is engaging with multiple gold mining and investment firms, seeking to deploy capital across mining, refining, trading, and royalty revenue stages, aiming to build its own “gold industry matrix.”

It has reportedly held talks with gold mining investment firm Terranova Resources. Although no deal was reached, the signals are clear:

Tether’s goal is not just financial investment but to systematically connect the entire gold industry chain.

Putting these pieces together, Tether’s gold strategy appears as a “top-down + bottom-up” dual approach:

Top-down, it starts from financial products, creating XAU₮ to meet global demand for gold through tokenization, establishing a “gold flow portal”;

Bottom-up, it extends along the supply chain—from gold bars, mining licenses, to potential mining investments—gradually bringing the assets and supply side of the gold industry into its control via investments and equity stakes.

Where does the faith in gold come from?

On the surface, Tether’s focus on gold might seem like “gold FOMO,” following central banks in buying safe assets.

But a longer-term view reveals a more coherent asset philosophy rooted in a clear worldview:

Using Bitcoin and gold to build a dual-pillared, safe balance sheet for an “unbanked central bank.”

CEO Paolo Ardoino has repeatedly stated he dislikes the phrase “Bitcoin is digital gold,” preferring to describe gold as “the natural Bitcoin”: equally scarce, tested over long periods, existing physically in the real world and digitally in the virtual.

In September 2025, Ardoino said, “As the world gets darker, Tether will continue to invest part of its profits into safe assets like Bitcoin, gold, and land.” He believes Bitcoin and gold will “outlast any fiat currency,” serving as ultimate stores of value across cycles.

As the promotional video for XAU₮ states, gold has symbolized power, stability, and truth for over five thousand years—measured by weight, not words.

Behind this is a series of moves Tether has made over the past two years:

On one hand, its quarterly disclosures show that its assets are heavily concentrated in US Treasuries, with holdings exceeding $120 billion, making it one of the largest single holders of US debt globally;

On the other hand, since 2023, Tether has repeatedly emphasized using a portion of quarterly profits to acquire “long-term value positions,” starting with Bitcoin and then gold—not to back USDT 1:1 but to strengthen the “hard asset” nature of its overall balance sheet and hedge against interest rate, credit, and geopolitical risks.

Therefore, Tether’s gold bets are driven by several clear motivations:

First, the most straightforward: turning profits into “something that no central bank can print more of.”

During high-interest-rate cycles, Tether has earned over $10 billion annually from its massive US debt holdings, with profits expected to exceed $15 billion in 2025. Ardoino is well aware that this “interest spread feast” is cyclical, while sovereign debt expansion is structural.

Over the past year, he has repeatedly mentioned the so-called “devaluation trade,” where investors, worried about long-term devaluation of sovereign debt and fiat currencies, are gradually shifting assets from government bonds and fiat to hard assets like gold.

Second, to hedge against extreme risks within the US dollar system.

USDT’s size has grown to the point where it is comparable to small national currencies and regional banking systems, forcing Tether to consider extreme scenarios: if someday US regulators or banks freeze its assets or if the entire dollar system faces systemic risks, relying solely on US debt and bank deposits could be too passive.

Gold, which does not belong to any sovereign credit and can be stored independently in self-built vaults, offers a solution. That’s why Tether is establishing vaults in Zurich and Singapore instead of leaving gold in the Bank of England or the New York Fed.

Third, in the RWA (Real-World Asset) era, gold is the most easily accepted off-chain asset.

In its Q1 2025 report, Tether explicitly described XAU₮ as “one of the largest and most compliant tokenized gold products,” emphasizing that all tokens are fully backed by physical gold bars stored in Swiss vaults.

This creates a clever closed loop:

On one side, Tether locks in physical gold exposure through purchases and investments in royalty companies like Elemental Altus;

On the other side, it slices and tokenizes this gold into tradable, composable DeFi collateral and settlement assets.

From a business perspective, this is about re-‘DeFi-izing’ the cash flow and valuation of the gold industry chain.

Every step of Tether’s asset allocation resembles a company learning how to act as a central bank.

It’s not just chasing yields but building a new order anchored by code, gold, and Bitcoin.

If the future moves toward a multi-polar currency system, then “US debt + Bitcoin + gold” will be more than an asset mix—it will be the balance sheet of this “unbanked central bank” navigating through cycles.