Key Points
Tether has introduced a stablecoin linked to gold, providing an alternative investment that acts as a safeguard against fluctuations in the U.S. dollar. The company has rapidly ascended to become a leading investor in gold.
Tether’s Significant Gold Acquisitions
This year, Tether has been aggressively acquiring gold, having purchased 26 tons in the third quarter of 2025 alone, surpassing the gold purchases of any central bank during that timeframe. By the end of September 2025, Tether’s total gold reserves reached approximately 116 tons, valued at around $14 billion. A significant portion of these reserves is allocated to bolster UST, Tether’s primary stablecoin, which is supported by a variety of assets, including gold. Notably, 12 tons of this gold is earmarked for Tether Gold (CRYPTO: XAUT), the fintech’s digital gold token.
Investing in Physical Gold Through Tether Gold
Tether Gold operates similarly to PAX Gold, functioning as a stablecoin where each token represents one troy ounce of gold securely stored in Swiss vaults. Its value generally mirrors the price of gold, making it a convenient way for investors to gain exposure to physical gold. However, to redeem XAUt for physical gold, investors must hold a minimum of 430 XAUt tokens, which is equivalent to one gold bar. Additionally, redemptions must occur in Switzerland, where the gold is kept.
Tether Gold as a Hedge Against the Dollar
Due to its direct connection to physical gold, Tether Gold serves as a robust hedge against the U.S. dollar. In 2025, gold experienced its most remarkable price increase since 1979, soaring by 67% (as of December 21). Consequently, XAUt has reflected a similar rise in value this year.
The Risks Involved with Tether Gold
Despite being labeled a stablecoin, XAUt is not devoid of risks. Like all cryptocurrencies, it operates without regulation. In 2017, Tether faced scrutiny for allegedly mismanaging its USDT reserves. Since that incident, the company has worked to strengthen its reserves and enhance transparency. However, there remains the possibility for Tether Gold to deviate from its gold backing due to market fluctuations, liquidity challenges, or regulatory changes, which could lead to price instability. For those aware of the inherent risks of cryptocurrency and seeking a less volatile entry into gold investment, Tether Gold could represent a relatively safer option.
Should You Consider Investing in Tether Gold Now?
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