Tether Utilizes $23 Billion Gold Reserves for Bullion-Backed Loans

Tether is set to enhance its offerings by launching a program that allows holders of its tokenized gold, Tether Gold (XAUT), to secure loans against their gold assets, leveraging its extensive $23 billion gold reserves.

This initiative, developed in collaboration with crypto lender Ledn, will enable users to borrow against their XAUT holdings without needing to liquidate their gold. The service is expected to roll out later this year, following a model similar to Ledn's established bitcoin-backed loans.

Tether, which claims to hold approximately 140 metric tons of physical gold stored in Swiss vaults, aims to use its substantial gold reserves to provide digital collateral akin to that of bitcoin. Each XAUT token is backed by one troy ounce of gold, facilitating liquidity for users while maintaining ownership of their assets.

According to Tether CEO Paolo Ardoino, the demand for solutions that blend long-term asset ownership with financial flexibility is rising as digital assets become more integral to the economy. This move marks a strategic expansion for Tether beyond its traditional stablecoin operations, as it continues to diversify its business interests in finance, energy, and AI.

In addition to the gold initiative, Tether has been actively investing in bitcoin mining, renewable energy projects, and AI infrastructure, demonstrating its commitment to a broader technological and financial ecosystem.