Why Tether Is Buying More Gold Than Many Central Banks?

Central banks worldwide are accumulating gold at an unprecedented pace in 2025.

China, India, Poland, Turkey and others have collectively purchased more than 1,100 tons of gold over the past year, marking a record high since the collapse of the Bretton Woods system.

Yet amid this global wave of gold accumulation, a "non-sovereign" buyer is quietly emerging as a major player: Tether, the parent company of USDT.

According to Bloomberg, Tether has become one of the world's largest gold buyers. As of September 2025, the company held over $12.9 billion in gold, surpassing the reserves of Australia, the Czech Republic, and Denmark, and placing it among the global top 30.

What's even more striking is the speed.

Over the past year, Tether bought more than one ton of gold per week on average, making it the third-fastest accumulator among all central bank-level buyers, behind only Kazakhstan and Brazil, and ahead of Turkey and even China's central bank.

That figure excludes the gold bars backing its gold-pegged stablecoin (XAU₮) and the additional private gold investments financed by its multibillion-dollar profits.

Tether isn't buying paper gold or ETFs. It's buying physical bars.d.

Unlike most central banks, which store gold at the Bank of England or the New York Fed, Tether builds and operates its own vaults. CEO Paolo Ardoino revealed in an interview that Tether has constructed "one of the most secure gold vaults in the world" in Switzerland, though he declined to disclose the exact location.

Tether is also building a second vault in Singapore to support its Asian reserve operations and the expansion of XAU₮.

A crypto company is now replicating central bank infrastructure, building its own vaults and a globally distributed reserve system.

Recently, Tether took an even more ambitious step by directly recruiting talent from the core of the gold market.

According to Bloomberg, Tether has poached two of HSBC's top precious metals traders: Vincent Domien, Global Head of Metals Trading, and Mathew O'Neill, EMEA Head of Precious Metals Financing. Both are currently serving their notice periods and are expected to join Tether in the coming months.

Domien also serves as a board member of the London Bullion Market Association (LBMA), the de facto standard-setting body for the global gold market, while O'Neill has spent his career at HSBC since 2008 and is a key figure in European precious metals financing.

A closer look reveals that Tether is not just buying gold. It has far bigger ambitions.

Tether’s Current Gold Footprint

If building vaults and stockpiling physical bullion represent Tether's first steps toward mirroring central banks on the asset side, its true ambition extends far beyond passive accumulation.

Tether wants to turn the entire gold industry into part of its financial ecosystem.

This blueprint operates across three layers: at the bottom is gold mining and concessions, in the middle is physical bullion, and at the top is tokenized on-chain gold.

Start with the part most people already know: XAU₮, a gold standard written into a smart contract. Tether Gold represents one troy ounce of physical gold stored in Swiss vaults and meeting London Bullion Market Association (LBMA) Good Delivery standards.

According to the latest official data, XAU₮ is backed by more than 370,000 ounces of physical gold, equivalent to over 11 tons of metal, all held in Swiss vaults. With the surge in gold prices, XAU₮'s circulating market value has surpassed $2.1 billion.

This means Tether now holds two layers of gold exposure:

One layer is the gold on its own balance sheet, which strengthens the credibility and resilience of USDT itself. The other layer is the gold backing XAU₮, which has been reorganized into a tokenized financial product that can circulate on-chain.

For example, Tether launched Alloy by Tether, an open finance platform that allows users to use XAU₮ as collateral to mint a synthetic dollar stablecoin, aUSDT.

Tether’s Expansion into the Physical Gold Industry

But Tether isn't stopping there. It wants to go deeper into the gold supply chain, and has begun investing directly in upstream royalty companies, bringing future gold production into its asset system.

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

Public filings show that through a series of agreements and incremental purchases, Tether could acquire more than one-third of Elemental Altus's shares, becoming a cornerstone shareholder. Tether even committed an additional $100 million to support the company's merger with EMX Royalty, helping build a mid-tier gold royalty platform.

Tether is not only buying gold that has already been mined.

It wants a share of the gold that will be extracted in the future.

And Tether isn’t limiting itself to a single type of asset. It is engaging with a much wider circle of players across the gold industry. According to the Financial Times, Tether has been in talks with multiple gold mining and investment companies, exploring opportunities to deploy capital across mining, refining, trading, and royalty income, with the goal of building its own “gold-industry matrix.”

It is also reported that Tether held discussions with Terranova Resources, a gold mining investment vehicle. Although the deal did not materialize, the message, however, was unmistakably clear.

Tether's goal goes beyond financial investment. It's building systematic control over the entire gold supply chain, from mine to market.

Put the pieces together and Tether's gold strategy emerges as a pincer movement, operating from both ends simultaneously.

From the top down, it starts at the financial product layer, launching XAU₮ to capture global demand for tokenized gold and establishing a major gateway for gold liquidity.

From the bottom up, it extends along the supply chain through bullion reserves, mining royalties, and potential mining investments, gradually bringing both the asset and supply sides of the gold ecosystem under its influence through capital and equity stakes.

From Treasuries to Bitcoin and Gold

At first glance, Tether’s aggressive move into gold might be dismissed as simple “gold FOMO,” following central banks into safe-haven assets.

But zoom out and trace the company's public statements and asset shifts over the past two years, and a clearer philosophy emerges. Tether is building a two-pillar safety foundation for a "stateless central bank," anchored by Bitcoin and gold.

Tether CEO Paolo Ardoino has repeatedly said he dislikes the phrase "Bitcoin is digital gold."

He prefers to reverse it as gold is "natural Bitcoin." Both are scarce and battle-tested over long periods, one in the physical world and the other in the digital realm.

In September 2025, Ardoino stated: "As the world becomes increasingly dark, Tether will continue investing a portion of its profits into safe assets such as Bitcoin, gold, and land."

To him, Bitcoin and gold will “outlast any other currency” and serve as the ultimate stores of value that can withstand any cycle.

As stated in the XAU₮ promotional video, for more than five thousand years, gold has symbolized power, stability, and truth, measured by its weight rather than by words.

Strategic Motivations Behind Tether’s Gold Accumulation

Behind this message lies a series of strategic moves Tether has made on the asset side over the past two years.

Tether's quarterly attestation reports reveal heavy concentration in U.S. Treasury bills. With holdings now surpassing $120 billion, Tether ranks among the largest single holders of U.S. Treasuries in the world.

At the same time, Tether has repeatedly stated since 2023 that it will allocate a portion of each quarter's profits to acquiring "long-term value positions."

First Bitcoin, then gold.

Not as 1:1 collateral for USDT, but as hard assets to strengthen the company's balance sheet and enhance its resilience against interest rate, credit, and geopolitical risks.

Tether's gold bet stems from several clear motivations.

First, the most straightforward: converting profits into assets "that no central bank can print more of."

During the high interest rate cycle, Tether earned more than $10 billion in annual profit from its massive U.S. Treasury holdings. Its 2025 profit is expected to exceed $15 billion. But Ardoino understands that this "yield feast" is cyclical, while sovereign debt expansion is structural.

Over the past year, he has repeatedly referenced the so-called "debasement trade," where investors gradually rotate assets from government bonds and fiat currency into hard assets like gold, driven by long-term concerns over sovereign debt and currency depreciation.

Second, hedging against extreme risks within the U.S. dollar system.

USDT has grown to a scale comparable to the currency supply of small nations or regional banking systems. This forces Tether to consider tail-risk scenarios.

What if U.S. regulators or the banking system exert pressure or freeze assets?

What if the entire dollar system encounters systemic stress?

Relying solely on Treasuries and bank deposits would leave Tether dangerously vulnerable.

Gold is not tied to any sovereign credit. By building its own vaults, Tether can keep these reserves entirely outside the traditional custodial system. This is why Tether is constructing its own vaults in Zurich and Singapore, rather than storing its gold at the Bank of England or the Federal Reserve Bank of New York for decades, as many central banks do.

Third, in the age of RWAs, gold is the most universally acceptable off-chain asset.

In its Q1 2025 report, Tether explicitly described XAU₮ as "one of the largest and most compliant tokenized gold products by market value," emphasizing that every token is backed 100 percent by physical gold bars stored in Swiss vaults.

This creates a clever closed loop.

• Tether secures exposure to both spot gold and long-term future production by buying bullion and investing in royalty companies like Elemental Altus.

• It then slices this gold into on-chain units through XAU₮, transforming it into globally tradable, composable DeFi collateral and a settlement asset.

The Stateless Central Bank Thesis

From a business perspective, this is essentially re-DeFi-ing the cash flows and valuation of the gold industry.

Every step in Tether's asset allocation resembles a company learning to operate as a central bank.

It isn't merely chasing returns. It is constructing a new kind of monetary order, one bounded by code and anchored by gold and Bitcoin.

If the world truly moves toward a multipolar currency system, then "U.S. Treasuries + Bitcoin + Gold" will not just be an investment portfolio. It will be the balance sheet that allows this "stateless central bank" to survive every cycle.

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