Tether Expands Use of Its $23 Billion Gold Reserves With Tokenized Loans
Through Ledn, XAUT holders will soon be able to borrow with physical gold as collateral. That ties Tether’s $23 billion in gold reserves to tokenized lending.
Key Takeaways
- Tether and Ledn will support Tether Gold, letting holders borrow against gold without selling.
- Tether owns about 140 tons of physical gold worth around $23 billion, stored in Swiss vaults.
- The move fits Tether’s broader strategy of investing beyond USDT in areas like bitcoin mining, energy, AI, and precious metals.
Tether is taking another step toward putting its roughly $23 billion (€20.2 billion) in gold reserves to work. In partnership with crypto lender Ledn, the company is adding support for Tether Gold (XAUT), a token backed by one troy ounce of physical gold. Once the service goes live, XAUT holders will be able to borrow against their gold without selling the token.
Expanding Gold Reserves in the Crypto Market
The new setup gives Tether’s gold holdings a more practical role. The company says it owns about 140 tons of physical gold kept in Swiss vaults, putting it among the largest private gold holders in the world. By turning that gold into tokenized collateral, Tether is making it usable in a digital lending format, much like bitcoin, while still keeping the underlying metal untouched.
The structure also mirrors Ledn’s long-running approach to bitcoin-backed lending. The firm says collateral is held 1:1 and is never lent out or used to earn yield, a model it contrasts with lenders that failed during the 2022 crypto winter.
Strategic Focus and Broader Investments
The move also fits Tether’s broader plan to use profits from its largest stablecoin, USDT, to grow beyond the stablecoin business. Alongside the expansion of XAUT, the company has been putting money into bitcoin mining, renewable energy, and AI infrastructure. It also has exposure to the precious metals space through investments in platforms such as Gold.com and partnerships with crypto financing firms like Antalpha.
Tokenized gold is part of a larger shift in which digital assets and traditional commodities are becoming more closely connected. As Tether Gold grows, it adds another layer to Tether’s presence in both crypto and precious metals.
Why This Matters for European Crypto Users
For European crypto investors, the development could matter because it creates another way to use gold as digital collateral. That may open the door to borrowing inside crypto platforms without having to sell physical assets first. It also points to a broader trend toward hybrid products that bridge traditional markets and digital finance.
