Jefferies: Tether’s 116-Ton Gold Hoard Rivals Central Banks
Stablecoin issuer Tether holds 116 tons of physical gold, a level comparable to the reserves of South Korea, Hungary and Greece, according to a Jefferies analysis cited by the Financial Times. Jefferies described Tether as the largest non-central-bank holder of gold and said its recent buying may be contributing to near-term moves in the metal.
Jefferies estimated that Tether’s purchases in the most recent quarter represented nearly 2% of global gold demand and close to 12% of central bank buying. The firm said the company’s accelerated accumulation over the past two months likely tightened supply in the short term and affected market sentiment, potentially encouraging speculative inflows.
Investors referenced by Jefferies indicated Tether aims to add another 100 tons of gold in 2025. With the company reportedly on pace to earn $15 billion in profit this year, the target appears attainable, the report said.
Tether expands gold-related strategy
Tether has invested more than $300 million this year in stakes across precious metals producers. In June, it acquired a 32% interest in Elemental Altus Royalties, a publicly listed Canadian gold royalty company.
In September, the Financial Times reported that Tether is evaluating opportunities throughout the gold supply chain — including mining, refining, trading and royalty businesses — as part of a broader effort to diversify its reserves.
Tether also issues Tether Gold (XAUt), a gold-backed token launched in 2020 and marketed as supported by bullion held in a Swiss vault. Blockchain data indicates XAUt’s supply has doubled in the past six months, with an additional 275,000 ounces (about $1.1 billion) created since August.
Jefferies said Tether is wagering that tokenized gold will gain wider adoption. The firm noted that physical gold can be impractical for retail investors, futures contracts involve roll costs, and gold ETFs typically charge management fees, while tokenization seeks to reduce these frictions.
Tether’s operations draw central bank comparisons
Tether’s daily operations reflect several functions commonly associated with central banks. It mints and redeems USDt (USDT) directly for verified clients, expanding or contracting supply through its primary issuance and redemption processes.
The company oversees a large reserve portfolio primarily composed of short-duration U.S. Treasurys, along with gold and Bitcoin (BTC), and earns interest income on those Treasurys while issuing a non-interest-bearing token.
Tether also employs policy-style measures, including freezing specific addresses at the request of law enforcement and discontinuing support for certain blockchains to reduce operational risk.
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