Tether Gold Reserves Near $9bn – Company Looks For More Investment Opportunities

Stablecoin Adoption And Acceptance

Tether is leading the charge to see stablecoins gain greater acceptance, and for governments and securities commissions to regulate such currencies. The US government has set out the basics of a regulatory framework for stablecoins, as part of its GENIUS Act.

GENIUS Act Requirements

The Act states that issuers must hold a 1:1 reserve of the currency. In the case of Tether, this means that for every USDT issued, it would have to hold 1 dollar in cash, treasury bills, or other related currency products.

Tether already meets this criterion. It also holds more than enough gold, which would likely be considered a low-risk investment worthy of backing the XAUt stablecoin. According to reports, Tether holds nearly $9bn in gold bullion, which is ten times greater than the $900m market cap of the coin itself.

XAUt Stablecoin

XAUt operates on multiple blockchains, including ERC-20 and TRC-20 networks. This means it is compatible with a wide range of wallets, making it easier for investors to hold the currency. However, the stablecoin is not currently available to purchase on major exchanges Binance or Coinbase. However, it can be purchased on Bybit and some other exchanges.

A Gold Investment Alternative

Buying physical gold can be difficult for smaller investors. There are charges for the acquisition and storage of bullion, and even gold coins have barriers to purchase. Delivery and vaulting charges mean that small physical investments are not viable. Digital gold services do enable buyers to purchase shares in gold bars, and there are various gold-backed and gold-tracked products available.

Gold ETFs are funds that invest in gold and offer shares to investors. Some major investment companies do offer these products. Currencies like XAUt work in a similar manner, but with the benefits that other cryptocurrencies have to offer.

Once you find an exchange or wallet that offers trading of the coins, transactions are completed quickly. Buyers are also afforded privacy and a degree of anonymity, and the currency is “stored” in digital wallets, making transactions simpler.

Tether’s Love Of Gold

Tether’s CEO, Paolo Ardoino, is a known fan of gold as an investment. He has previously said that it offers a more secure investment than any national currency. He has also described it as being natural Bitcoin.

Ardoino’s positive attitude towards gold is likely one of the driving forces behind his company’s hunt for more gold investment opportunities. However, it is also likely a business decision. Tether recently reported $4.9bn in profit for the second quarter of this year, driven at least partially by gold’s value.

Two years ago, gold was priced at less than $2,000 per troy ounce. Today, it is valued at just shy of $3,600, representing an increase of around 80% during the period. Tether also likely holds a substantial amount of Bitcoin, which in the same two-year period has increased in value from $26,000 to its current value of $112,000.