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Key Takeaways:
- Tether’s private vault in Switzerland stores nearly 80 metric tons of gold worth $8B.
- The vault enhances the scalability of the XAUT token while reducing custodial fees.
- Regulatory developments like the GENIUS Act may challenge Tether’s gold reserve model.
Tether, the world’s leading stablecoin issuer, has constructed a privately owned gold vault in Switzerland to store $8 billion in physical gold. This strategic move underscores Tether’s evolving approach to reserve diversification and cost control while navigating increasing regulatory scrutiny.
Tether Gold Vault Strengthens Token Utility and Cuts Custody Fees
The newly built vault holds nearly 80 metric tons of gold—representing around 5% of Tether’s total $112 billion reserve portfolio. Unlike typical arrangements that rely on third-party custodians, Tether’s direct ownership of the facility allows it to bypass annual storage fees, which can be as high as 50 basis points for large holdings.
⚡️ NEW: Tether holds an $8B gold stockpile in a secret Swiss vault, with nearly 80 tons making it one of the largest holders outside banks and nations. pic.twitter.com/gYTPpQdGCl
— Cointelegraph (@Cointelegraph) July 8, 2025
The vault also supports the firm’s gold-backed token, Tether Gold (XAUT), which has a current market value of approximately $819 million. The physical gold backing the token totals about 7.7 metric tons. With full control of its vault, Tether believes it can scale XAUT more efficiently and cost-effectively.
Gold Demand Surges Amid Economic Uncertainty
Global interest in gold is on the rise, with central banks—particularly those in BRICS countries—significantly increasing their holdings. This trend has also revived gold-based ETFs, reflecting renewed investor interest in the precious metal as a hedge against inflation and economic instability.
By building its own vault, Tether now matches the gold exposure of major financial institutions like UBS Group. This positions the company as a hybrid player blending traditional asset security with digital finance innovation.
Regulatory Risks Could Force Reserve Changes
Despite the bullish gold strategy, regulatory headwinds loom large. Lawmakers in the U.S. and EU are proposing rules that could limit what assets stablecoin issuers like Tether can hold. The GENIUS Act, recently passed in the U.S. Senate, would require stablecoin reserves to consist solely of cash and short-term government securities.
If implemented, these rules could compel Tether to significantly reduce—or eliminate—its gold reserves, potentially impacting the future of its XAUT token and reserve strategy.
Also Read: Trump’s Pro-Crypto Agenda Sparks $1B Tether Surge Ahead of “Crypto Week
Tether’s bold gold play comes as it retains dominance in the stablecoin sector. Its flagship token, USDT, has reached a $159 billion market cap, capturing over 62% of the $255 billion stablecoin market.
By integrating gold into its reserve strategy, Tether is not only diversifying but also introducing a traditional asset layer into the digital currency ecosystem—an approach that could influence future trends in reserve management across the industry.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
