Industry insiders report a significant development involving Tether, the issuer of the world’s largest stablecoin, USDT. After generating a remarkable $5.7 billion in net profit in the first half of the year, Tether is reportedly pursuing investment opportunities within the gold industry. These discussions encompass various sectors of the gold supply chain, including mining, refining, trading, and royalty income firms.
According to a recent report from the Financial Associated Press, four sources close to the matter indicated that Tether has already begun talks with several potential investment targets related to this precious metal. The move has raised eyebrows within both the Web3 community and traditional financial sectors, given the historical significance of gold as a store of value.
Despite its long-standing status, the interest from a digital-focused entity like Tether into gold has had some commodities professionals scratching their heads. A senior executive noted, “Among the companies I have dealt with, they are the strangest,” reflecting the often perplexing intersections between Web3 initiatives and traditional finance.
Tether’s interest in gold is not merely theoretical; the company already holds a substantial quantity of gold as part of its reserves. The recently released semi-annual report revealed that Tether possesses gold bars worth $8.7 billion stored in its Zurich vault, integral to backing its stablecoin. Additionally, Tether holds a gold-backed stablecoin, albeit with limited market acceptance, currently valued at approximately $880 million.
Contrary to a common misconception that stablecoin issuers primarily invest in U.S. Treasuries for returns, Tether’s report showed a diversified portfolio. At the close of the second quarter, the company had over $127 billion in U.S. Treasury exposure. However, a striking portion of its net profit—$2.6 billion—was attributed to the appreciation of its gold and Bitcoin holdings.
In a prior move, Tether Investments, which manages the firm’s external investment profits, bought a stake worth $105 million in Elemental Altus, a publicly traded gold royalty company. Firms like Elemental Altus invest in mining operations and gain future revenue shares. According to sources, Tether is looking to expand its investment in Elemental Altus and has also been in negotiations with other gold royalty companies.
Furthermore, discussions with Terranova Resources, an investment tool focused on gold mining, have occurred, although no agreement has been finalized.
This pivot toward gold also intersects with the broader debate regarding value storage in the digital age. Within the Web3 community, Bitcoin is often referred to as “digital gold.” Tether CEO Paolo Ardoino, who openly supports the value of gold, recently articulated his perspective: “I believe gold is the primitive value carrier bestowed upon us by nature,” positioning gold as a natural counterpart to Bitcoin rather than its alternative.
Additionally, Tether has carved out a significant role in commodity trade financing, providing short-term financing for raw materials, with its trading book reportedly reaching several billion dollars. As Tether forges its path in the gold industry, the intersection of traditional and digital value systems continues to draw interest and skepticism from various sectors.
