Tether has been buying metric tons of gold like hotcakes this year, purchasing 26 tons of gold in the third quarter of 2025, which is more than any central bank purchased within that duration. As of late September 2025, the company's total gold holdings are approximately 116 tons, valued at around $14 billion. The majority of that amount is reserved for backing UST, Tether's main stablecoin, which is backed by various assets, including gold. However, 12 tons of that holding are reserved for another digital token issued by the fintech firm: Tether Gold (XAUT 1.15%).
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Tether Gold allows investors to invest in physical gold digitally
Similar to PAX Gold, Tether Gold is a stablecoin, where each token is backed by one troy ounce of gold that is stored in Swiss vaults. It follows the price of gold, often floating around the same price as the metal. Investors can redeem XAUt for physical gold, but they're required to have at least one gold bar's worth, at least 430 XAUt tokens, according to Tether. The gold must also be redeemed in Switzerland since that's where it's stored.
Because it's tied to physical gold, Tether Gold is a strong hedge asset against the U.S. dollar. Gold had its best year since 1979, climbing up 67% in price in 2025 (as of Dec. 21). Thus, XAUt has surged by essentially the same percentage this year.
CRYPTO: XAUT
Key Data Points
Just because XAUt is a stablecoin doesn't mean it's risk-free
As with all cryptocurrencies, XAUt is unregulated. And in 2017, Tether was exposed for allegedly misusing its reserves of USDT. Since then, however, the fintech company has consistently bolstered and maintained its reserves, while also increasing transparency regarding its reserves. Tether Gold can also de-peg from gold (rarely) due to market conditions, liquidity issues, and regulatory changes. This can cause the token to spike or drop below gold's actual price. But if investors are aware of the risks with crypto and want easier access to investing in gold, Tether Gold is one of the least risky cryptocurrencies to invest in with $100.
