Paolo Ardoino, Chief Executive Officer of Tether, has stated the company’s intention to allocate between 10% and 15% of its investment portfolio to physical gold. The announcement, made in remarks reported in October 2023, outlines a strategy to increase the company’s holdings of the precious metal, which already constitutes a portion of the reserves backing its products.
Tether is the issuer of USDT, the world’s largest stablecoin by market capitalization. A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to an external asset, most commonly a fiat currency like the U.S. dollar. The company holds a portfolio of reserve assets intended to ensure that each USDT token is backed by assets of equivalent value.
Ardoino’s statements indicate a plan to systematically increase the company’s gold holdings. He confirmed that this allocation would be in addition to the gold Tether already holds.
According to Tether’s quarterly attestation report for the third quarter of 2023, the company held approximately $3.1 billion in physical gold, which represented about 3.6% of its total reported reserves of $86.4 billion at the time. The majority of Tether’s reserves, approximately $72.6 billion or over 84%, were held in U.S. Treasury bills.
The stated goal of increasing gold allocations is part of a diversification strategy for the assets backing USDT. The company’s reserves are periodically audited and disclosed in public reports, which provide a breakdown of the asset classes it holds. These have historically included cash and cash equivalents, corporate bonds, precious metals, and other investments.
The plan to increase gold holdings to a 10%-15% share of the portfolio would mark a significant shift in the composition of Tether’s reserves if fully implemented. The company has not provided a specific timeline for achieving this target allocation.
