From Digital Gold to Physical Gold, Tether Eyes Gold Miners Investments in Bold Reserve Shift

TradingKey - No longer content with its bets on bitcoin — often called “digital gold” — and the broader cryptocurrency market, Tether, the issuer of the world’s largest stablecoin USDT, is now moving into physical gold mining. Amid skepticism from traditional gold industry players, Tether’s gold strategy is not entirely new.

According to an exclusive report by the Financial Times, Tether is in talks to invest in gold mining operations, aiming to deploy its massive profits from the crypto sector into the physical gold industry.

Sources said Tether has held discussions with mining companies and investment groups about investing across the entire gold supply chain — including mining, refining, trading, and royalty companies.

As a scarce and stable natural precious metal, gold preserves value and hedges against economic risks over the long term. Its physical and financial attributes have driven gold prices to new highs this week, even amid adverse macroeconomic conditions. 

Due to similarities with gold — such as limited supply, trust through immutability, and inflation resistance — bitcoin has earned the nickname “digital gold,” and recently hit a new all-time high.

Tether CEO Paolo Ardoino has called gold “natural Bitcoin.” In a speech four months ago, he said:

“I prefer to think in bitcoin terms — I think gold is our source of nature.”

To Ardoino, gold is a safer asset than any sovereign currency and can complement Bitcoin. He noted that if people grow concerned about the potential rise in U.S. debt, they will seek alternatives. Every BRICS central bank is buying gold — that’s the key reason behind rising prices.

As a mature and traditionally conservative industry, gold professionals are both surprised and puzzled by this new entrant. One miner said that Tether loves gold, but they may not have a real strategy. A commodities firm described Tether as “the weirdest company we’ve ever dealt with.”

In reality, Tether’s move into gold is nothing new. In early 2020, Tether launched Tether Gold (XAUt), a bold venture into commodity-backed tokens from fiat currency.

Each XAUt token represents one troy ounce of physical gold, stored in vaults in Switzerland, giving investors exposure to gold within their portfolios. Tether reportedly holds $8.7 billion worth of gold bars in a vault in Zurich.

In June, Tether acquired a minority stake in Elmental Altus, a Toronto-listed gold royalty company, for $10.5 billion, and added another $10 billion this past Friday.

Today, Tether is not just a stablecoin giant — it has become a major player in the gold market through holding large physical gold reserves, issuing gold-backed tokens, and strategically investing in the gold industry. 

Analysts say Tether’s gold strategy strengthens the asset base of its stablecoins and enhances its resilience to financial risks.