Tether Holdings, issuer of USDT, the largest stub coin on the market, has revealed that it is maintaining a Swiss safe to protect its impressive $8 billion in gold.
According to Bloomberg, the company’s nearly 80 tonnes of key reserves are linked as one of the world’s largest gold holders, rising only by central banks and sovereign states, with the El Salvador-based company expressing its intention to further expand its gold reserves.
Tether reveals 5% of precious metal reserves
In a recent interview, Tether CEO Paolo Ardoino highlighted the safety of their vaults, claiming it is one of the safest facilities in the world. He checked the location of the Swiss vault, but he chose not to disclose its exact location, citing security concerns.
Tether is best known for its Stablecoin, USDT, which aims to maintain one-to-one value in US dollars. According to data from CoinmarketCap, USDT dominates the Stablecoin market with a capitalization of $158 billion. Circle’s USDC is closely behind its $61 billion capitalization.
However, the companies are expected to see a major surge in this metric as the Genius Act, a recently approved U.S. Senate stubcoin bill, aims to provide issuers with a new regulatory framework that can further enhance the adoption and use of assets by traditional financial companies.
The company also generates revenue by exchanging dollars for USDT tokens and investing collateral in a variety of assets, including the US Treasury. According to Tether’s latest financial report, Precious Metals currently accounts for almost 5% of the company’s reserves.
Benefits of Gold-Backed Xaut Tokens
In addition to USDT, Tether introduces a gold support token known as Xaut, each token represents a 1 ounce of gold. The token holder has the option of redeeming Xaut for physical gold that can be collected directly from a Swiss safe.
Ardoino has made it clear that its belief in gold as a safer asset compared to the country’s currency, particularly in light of growing concern over rising US debt levels.
He noted that as these concerns grow, investors may seek alternatives such as gold. The company’s CEO further emphasized that all central banks in the BRICS country are actively purchasing gold. We believe this is contributing to the rise in prices of precious metals.
The decision to establish Tether’s own safe rather than relying on traditional precious metal storage was primarily influenced by cost considerations, according to the report.
As of press time, Circle’s newly launched CRCL has closed trading dates at $204. There is a roughly 31% gap between the current valuation and the record price of $298.
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