Bitcoin Updates: Tether’s Gold Holdings Confront U.S. Regulations, Drive Gold Prices Up by 50%

Tether, the company behind the world's most widely used stablecoin

, has become the largest private holder of gold worldwide, overtaking the gold reserves of numerous central banks. By the third quarter of 2025, Tether possessed close to 116 metric tons of gold, with an estimated worth of $12.9 billion, from Jefferies and the company’s own attestation documents. This swift accumulation—26 tons added in just Q3, making up 2% of global demand—has established as a significant force in the gold sector, like those in South Korea, Hungary, and Greece. This move marks a deliberate shift toward diversifying into physical assets, with gold now accounting for about 7% of Tether’s total reserves .

The rapid growth in gold reserves signals a broader change in how stablecoin issuers manage their backing, which has typically relied on cash and short-term government debt. Tether’s assertive gold purchases, along with its $9.9 billion in

holdings, have sparked both approval and concern. Supporters claim gold offers protection against economic turmoil and inflation, while detractors warn of the dangers of holding less liquid assets in a sector that demands high liquidity. The U.S. GENIUS Act, which took effect in July 2025, requires stablecoin issuers to fully back their tokens with "high-quality liquid assets," making Tether’s gold and Bitcoin reserves ineligible for compliance in the U.S. , Tether intends to introduce a new stablecoin, USAT, for its American business, which will not be backed by gold.

Tether’s gold acquisition strategy is already having an impact on the physical gold market.

that Tether’s persistent buying has played a major role in the 50% surge in gold prices this year, tightening short-term supply and fueling optimism among investors. The company’s gold-backed token, XAU₮, has also seen increased adoption, with its market value by the third quarter of 2025. Tether’s reach goes beyond direct gold purchases; it has invested over $300 million in gold royalty firms and brought on board former HSBC metals traders, to the gold industry.

Nevertheless, Tether’s exposure to riskier assets has attracted criticism from credit rating agencies.

its assessment of Tether’s ability to maintain its dollar peg to "weak" in November 2025, citing the company’s increased holdings in gold, Bitcoin, and other illiquid assets, as well as a lack of transparency in how reserves are managed. that Bitcoin now makes up 5.6% of Tether’s reserves, surpassing its overcollateralization buffer and leaving the stablecoin at risk of being undercollateralized if asset prices fall. A Tether spokesperson has defended the firm’s approach, as a "borderless central bank" with a diversified reserve base designed to weather economic shocks.

Looking forward, Tether’s gold-focused approach could transform the stablecoin industry. While the launch of USAT may lessen its dependence on gold in the U.S., Tether’s broader ambition to incorporate real-world assets into digital finance could spur further innovation in tokenized commodities. The ultimate success of this strategy will hinge on regulatory clarity, thorough auditing, and sustained trust from the market. For now, Tether’s record gold reserves highlight its expanding influence across both the crypto and traditional financial sectors, challenging established ideas about reserve management and asset-backed digital currencies.