Tether bets on gold: the strategy of the stablecoin giant towards the mining sector

Tether, the largest stablecoin company in the world, is surprising the financial and mining sector with an unexpected move: directly investing in the gold industry. 

After recording record profits of 5.7 billion dollars in just the first half of the year, the group led by Paolo Ardoino is considering how to use part of its substantial resources, accumulated thanks to the success of the USDT token, to enter the physical gold business.

According to sources close to the negotiations, Tether has initiated talks with mining companies and investment groups, exploring opportunities throughout the entire gold supply chain: from extraction to refining, up to trading and royalty companies. 

An interest that has taken the traditionally cautious mining sector by surprise, raising questions about how such an innovative and atypical player can fit into a historically conservative industry.

Gold and Bitcoin: An Increasingly Close Relationship Embraced by the Giant Tether

The CEO of Tether, Paolo Ardoino, has never hidden his admiration for gold, calling it “natural bitcoin.” In a public statement in May, Ardoino declared: 

A vision that reflects the growing affinity between some leaders in the crypto sector and the precious metal, considered for millennia a safe haven asset, while bitcoin has only fifteen years of history as a digital asset.

However, Tether’s move has puzzled many operators in the gold industry. “They like gold. But I don’t think they have a strategy,” commented a mining executive. Another manager in the commodities sector described Tether as “the strangest company I’ve ever dealt with,” highlighting the skepticism surrounding this foray.

Tether’s Financial Moves in the Gold Sector

Despite the concerns, Tether has already consolidated a significant position in the gold market. According to official financial statements, the company holds 8.7 billion dollars in gold bars stored in a vault in Zurich, used as collateral for its stablecoin. This exposure was further strengthened last June, when Tether Investments – the vehicle tasked with managing the group’s investments – acquired a minority stake of 105 million dollars in the Canadian company Elemental Altus, specializing in gold royalties.

Tether’s interest did not stop there. The company has initiated negotiations with several other royalty companies, which finance mines in exchange for a share of future revenues. Just recently, Tether invested another 100 million dollars in Elemental, just as the latter announced a merger with rival EMX. Juan Sartori, head of Tether’s business initiatives, stated that these operations are part of the group’s strategy to increase its “exposure to gold.”

Diversification and innovation: between tokens and commodity finance

In addition to direct investments, Tether has also explored other avenues to strengthen its presence in gold. As reported by the Financial Times, the company has initiated talks with Terranova Resources, a mining investment vehicle based in the British Virgin Islands, although these negotiations did not lead to an agreement.

In parallel, Tether manages XAUt (Tether Gold), a crypto token pegged to physical gold. However, the success of this product is still limited compared to the USDT token: the market capitalization of XAUt stands at 880 million dollars, a modest figure when compared to the 168 billion dollars of USDT, the most traded stablecoin in the world.

But Tether’s diversification is not limited to the precious metal. The group has also built a significant position in commodity trade finance, providing short-term financing for the transportation of raw materials. According to industry sources, Tether’s trading portfolio in this area has reached several billion dollars.

The context: the convergence between physical gold and digital assets

Tether’s interest in gold is part of a broader trend where other players are attempting to build a bridge between the cryptocurrency world and traditional safe-haven assets. An example is Blue Gold, a Nasdaq-listed company and owner of a mine in Ghana, which is planning the launch of digital tokens linked to future gold production. 

The CEO Andrew Cavaghan is convinced that:

Questions and Future Prospects

Despite Tether’s ambitions, the mining sector remains cautious. The company’s reputation as a “non-conventional” player and its deeply digital nature pose a cultural challenge for a sector accustomed to more traditional logics. It remains to be seen whether Tether’s strategy will succeed in consolidating and bringing innovation to a sector that, although ancient, is now at the center of an epochal transformation.

Tether’s bet on gold, between direct investments, tokenization, and commodity finance, represents a bold attempt to redefine the relationship between digital finance and tangible assets. If successful, it could mark a new era for the convergence between physical gold and digital assets, opening up unprecedented scenarios for both the mining sector and the cryptocurrency sector.