Tether, the stablecoin issuer, has become one of the world’s largest holders of gold reserves, currently valued at $24 billion. To safeguard this valuable asset, the company stores its gold in a former nuclear bunker in Switzerland. Tether has expressed its intention to continuously increase these reserves, signaling its financial stability and commitment to building trust. As a well-known stablecoin pegged to the US dollar, Tether supports its cryptocurrency with real assets such as cash and precious metals to maintain price stability. Gold, regarded as a traditional safe-haven investment, provides stability during financial crises and crypto market volatility. The decision to store gold in a secure Swiss nuclear bunker underscores Tether’s emphasis on backing its cryptocurrency with strong and reliable assets. This investment is expected to boost market confidence in Tether’s stability, especially amid heightened scrutiny over liquidity and asset transparency faced by stablecoins. However, investing in gold carries risks, including fluctuations in global gold prices that could impact Tether’s financial balance. Going forward, Tether’s approach may set a precedent for other stablecoins to focus more on real asset backing to preserve price stability, potentially contributing to greater stability and confidence in the crypto market.
Source: decrypt
