Tether raised its gold reserves to more than 146 metric tons after adding 14 tons in the second quarter, more than double the amount it bought in the first quarter. The stablecoin issuer said the purchases back both its USDT and XAUT tokens, even as gold posted its sharpest quarterly decline since 2013.
Gold buying more than doubles from Q1
Tether increased its gold reserves to more than 146 metric tons after adding 14 tons during the second quarter, the company said Friday in a statement covering its April-June results. The company had purchased six tons during the first quarter, so the pace of buying more than doubled quarter over quarter.
The acceleration came as gold posted its sharpest quarterly decline since 2013, falling 14% during the same three months.
Reserves back two separate tokens
Tether became a major gold buyer last year for reserves backing the USDT stablecoin, which has $183.7 billion worth of tokens in circulation. It also backs the Tether XAUT gold token, which has $2.9 billion in circulation. Each Tether-issued dollar token represents one U.S. dollar held in reserve.
When a user provides Tether with a dollar, the company issues one USDT and holds assets of equivalent value, such as U.S. Treasury bills. Those reserves are designed to ensure USDT can be redeemed for dollars when needed, while the XAUT stablecoin is fully backed by gold. Reserves backing USDT included gold stocks worth $18.8 billion at the end of June, according to the report.
Ardoino cites Treasury and lending moves
Paolo Ardoino, Tether's CEO, said in the statement that the company remained one of the world's largest buyers of U.S. Treasuries and reduced secured lending by $2.38 billion, adding that it "added 14 tons of physical gold". Tether's net operating profit for the quarter reached $1.50 billion, driven by the U.S. Treasury portfolio and repo performance, he added.
Source: Investing.com
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