Tether now holds 80 tons of gold
HalfDime
Posts: 389 ✭✭✭✭
Tether has confirmed it’s now holding nearly 80 metric tons of gold, worth around $8 billion, inside a private vault in Switzerland. The vault is fully owned by the company, and the exact location hasn’t been disclosed.
Chief Executive Paolo Ardoino told Bloomberg that this decision was about ownership, scale, and cost. The company is based in El Salvador and is best known as the issuer of USDT, the world’s largest stablecoin.
Tether now holds $159 billion worth of tokens in circulation, which are backed by various reserves, including US Treasuries and precious metals. Paolo made it clear that the move to physical gold storage is strategic and intended to reduce long-term costs. “If you have your own vault, eventually, with the size, it gets much cheaper to do custody,” he said.
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Even crypto wants to hold gold in a secret vault.
Comments
Tether (USDT) has held a steady price of $1.00 since it was listed in 2020. Don't understand why anyone would buy it. Please, enlighten me.
No Way Out: Stimulus and Money Printing Are the Only Path Left
stablecoins are not for appreciation. they exists as something to do transactions and avoid price swings
Is the gold... for backing the stablecoin? Or is it just their own profit from selling electronic 'blips' to people?
Regardless... not for me
People are using stablecoin to avoid forex fees and to park their money in stablecoin in one currency or another for inflation protection. Others are staking their stablecoins on a chain for promise of future return, and their are even interest bearing accounts in some stablecoins. Risks include under collateralization and shocks if an underlying asset has issues. For example, a typical US dollar-tied coin probably doesn't hold 1:1 in dollars and may hold other assets - say, US treasuries. If there is a sell off in such assets, the stablecoin can be at risk of failure. USG is endorsing these types of investments these days, and once the failures come, and they likely will, regulators will need to bail them out. What fun.
My point is USDT has never gained or lost value (always $1.00) since it was listed on the exchanges in 2020. Doesn't seem to be an investment at all. If it protected against inflation it would not have the same $1 value it has had since 2020. $1 US currency invested in USDT in 2020 would still be worth $1 that has shrunk via inflation.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Tether is backed 1:1 with US treasuries, so it is backed by the dollar. You would use Tether to make instant settlement transactions outside of the banking system. Yes, Paypal, Venmo, debit and credit cards do this, but in limited quantities and not across borders (CCs across borders) and the fees would be much less to settle in Tether than a CC for the seller of the goods.
Want demand for US treasuries and the dollar? Well, here it is. You are in Argentina, Egypt, Lebanon, Brazil (name any country with higher inflation) and you want to quickly convert your failing local currency into a relatively stable currency, the US dollar...Stable coins, Tether.
what happens when treasuries fail?