Tether’s Gold Purchases Introduce Fresh Risks
Tether, a major player in the cryptocurrency landscape, has made headlines with its recent expansion into gold purchases. In the past few months, Tether has surpassed traditional central banks to become one of the most significant gold buyers globally.
Tether’s Aggressive Gold Purchases
In a notable shift, Tether purchased 26 tonnes of gold in the third quarter of 2025. This increase highlights Tether’s strategy to strengthen its reserves amid rising concerns about economic instability.
Gold Prices and Market Dynamics
The gold market experienced a remarkable surge, with prices rising 56% in 2025. Factors contributing to this increase include:
- Fiscal dominance
- Rising public debt
- Loose monetary policies
- Declining trust in major currencies
These concerns have led central banks from countries like Kazakhstan, Brazil, and Turkey to bolster their gold reserves. In this context, Tether’s substantial purchases reinforce gold’s standing as a safe-haven asset.
Tether’s Gold Holdings
As of the end of September 2025, Tether’s total gold holdings reached approximately 116 tonnes, valued around $14 billion. This substantial amount includes about 104 tonnes backing USDT and 12 tonnes associated with their tokenized gold product, XAUt.
The Impact of the GENIUS Act
Tether’s gold investment strategy raises questions in light of the recent US GENIUS Act, which restricts compliant issuers from holding gold as part of their reserves. This law encourages the use of more liquid assets, like cash or Treasury bills.
Despite this regulatory backdrop, Tether has continued expanding its gold reserves, illustrating a potential conflict with the law. Additionally, Tether has announced plans for a GENIUS-compliant token, USAT, which will not include gold in its backing.
The Risks Ahead
Tether’s substantial gold holdings introduce new risks within the cryptocurrency market. If the demand for stablecoins declines, pressure may mount on the assets backing them, including gold. A swift market downturn could result in unexpected bullion sales, exposing gold to the volatility typically associated with cryptocurrencies.
Conclusion
Tether’s significant investments in gold showcase a new trend of merging traditional safe-haven assets with cryptocurrency dynamics. As the situation evolves, the implications for both the gold market and the broader crypto landscape remain to be seen.
