Tether is turning its $23 billion gold pile into a lending business

@Tether is putting its vast gold reserves to work. The stablecoin issuer is partnering with crypto lender Ledn to bring gold-backed loans to holders of its tokenized gold token, XAUT, with the product expected to go live before the end of 2026.

Borrowing Against Bullion

The partnership integrates Tether Gold (XAUT) into Ledn's platform alongside Bitcoin and stablecoins, with gold-backed loans expected to follow later this year. The arrangement would let XAUT holders use their holdings as collateral for loans instead of selling off the gold they own. Ledn plans to roll out gold-backed loans denominated in Tether's stablecoins, with borrowers able to choose between $USDT and the newly launched USAT.

The structure mirrors Ledn's existing bitcoin-backed lending model, with client collateral held on a 1:1 basis and not lent out or used to generate yield. That approach is a deliberate contrast to the aggressive rehypothecation strategies that brought down rivals such as Celsius and BlockFi during the crypto downturn of 2022. The lending product will not be available to residents of Canada or the EU.

Each XAUT token represents one troy ounce of physical gold stored in Swiss vaults, according to Tether. XAUT's market cap recently surpassed $3 billion, making it one of the most significant commodity-backed tokens in crypto.

One of the World's Largest Corporate Gold Holders

Alongside growing XAUT, Tether has accumulated roughly 140 metric tons of physical bullion, making it one of the world's largest corporate gold holders. That stockpile makes it one of the largest known holders of gold outside of governments, central banks, and major ETFs. Tether CEO Paolo Ardoino has previously described the ambition in stark terms, telling Bloomberg that the company intends to become one of the largest "gold central banks" in the world.

The move is the latest example of Tether leveraging the profits generated by $USDT, the world's largest stablecoin, to expand beyond its core business, reshaping itself into a broader technology and infrastructure group spanning finance, energy, and AI. It has also invested in precious metals marketplace Gold.com and partnered with crypto financing firm Antalpha to expand the use of XAUT in lending and physical redemption.

Gold-backed lending is traditionally the realm of central banks, major financial institutions, and bullion dealers. Tether and Ledn argue that by tokenizing physical gold, the asset can function more like bitcoin as digital collateral, unlocking liquidity without requiring a sale.

Sources:
CoinDesk: Tether putting $23 billion gold stockpile to work with bullion-backed loans
Crypto Briefing: Tether expands gold reserve use as Ledn supports tokenized gold XAUT
CoinDesk: Tether is buying up to $1 billion of gold per month and storing it in a James Bond bunker