Tether, the issuer of the world’s largest stablecoin USDT, is exploring potential investments in the gold supply chain – from mining to trading and royalty companies. Sources told the Financial Times that the company has held talks with several industry participants. Against the backdrop of high profits from cryptocurrency operations, Tether is looking for ways to diversify its assets. Representatives of the gold mining sector view this interest with skepticism.
Crypto Profits Flow Into Gold
According to the Financial Times, Tether is in discussions with investment structures, gold mining and processing companies, as well as royalty firms that finance the development of deposits in exchange for a share of future revenues.
Four sources close to the talks said Tether’s interest covers all stages of the gold supply chain: mining, refining, trading, and investing. One of the counterparties was Terranova Resources, registered in the British Virgin Islands. However, the deal did not take place.
Actual Investments Have Already Begun
According to its financial statements, Tether already holds gold bars worth $8,7 billion. Gold is used as collateral for the company’s stablecoins. In addition, through its subsidiary Tether Investments, the company acquired a minority stake in Canadian gold royalty firm Elemental Altus for $105 million in June.
The report states that Tether is considering additional investments in Elemental Altus and other similar companies.
The Market Does Not Understand What Tether Is Doing
Despite the scale, Tether’s interest in gold has caused skepticism among representatives of the traditional commodities sector. An executive at a gold mining company said he saw no coherent strategy in the actions of the crypto company. A representative of a commodities trader called Tether “the strangest company” he had ever worked with.
Meanwhile, Tether CEO Paolo Ardoino continues to speak in support of gold. He called the metal “natural bitcoin” and said he prefers to think in bitcoin terms. According to him, gold is a resource given by nature.
In the first half of the year, Tether earned $5,7 billion in profit. The market capitalization of USDT stands at $168 billion. The company also holds a large portfolio of U.S. Treasury bonds and earns from interest payments.
In addition to USDT, Tether issues the XAUt token backed by physical gold. However, its capitalization remains much lower at $880 million. The company is also actively involved in commodity trade finance, providing short-term loans for raw material supplies. According to industry participants, the volume of this business has grown into the billions of dollars.
Other Initiatives in the Market
Other companies are also showing interest in linking gold and digital assets. Blue Gold CEO Andrew Cavaghan announced plans to tokenize the future output of a Guinean gold mining company. He believes a gold-backed token could become a new means of settlement thanks to its physical peg.
Read also:
- Bitcoin Is Getting Closer to Gold as a Safe-Haven Asset — Fidelity
- Kyrgyzstan Launches Gold-Backed Stablecoin USDKG Pegged to the Dollar
- Tether Will Not Seek License under MiCA Regulation and Exits EU Market
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