(Kitco News) - The digital asset industry continues to establish itself as an important pillar of the global gold market, with the latest data showing Tether increasing its gold holdings at a pace that rivals global central banks.
On Friday, the world's leading stablecoin issuer published its second-quarter financial report, reporting $1.5 billion in net operating profit and revealing that it added 14 tonnes of physical gold during the quarter. The purchase brought the company's total bullion holdings to more than 146 tonnes, valued at approximately $18.8 billion, making Tether one of the world's largest private holders of physical gold.
The company said the issuance of its USD₮ stablecoin increased to $184.6 billion in tokens outstanding at the end of the second quarter, about $446 million higher than at the end of the first quarter. The increase came despite a decline in the industry's total market capitalization.
"USD₮'s resilience extended its market share to more than 60% of the total stablecoin market. The results demonstrate the strength and resilience of Tether's reserve strategy through significant volatility across gold and Bitcoin," the company said in the press release.
The company added that, as of the end of the quarter, its reserves exceeded its liabilities by approximately $4.11 billion.
"Q2 demonstrated the strength of Tether's reserve strategy under real market pressure," said Paolo Ardoino, CEO of Tether. "The assets that back some of Tether's reserves were tested directly during the quarter. Through all of the volatility, USD₮ remained fully backed, with our reserves still exceeding liabilities by $4.11 billion. Our net operating profit for the quarter was $1.50 billion, led by a strong U.S. Treasury portfolio and repo performance. We remained one of the world's largest buyers of U.S. Treasuries, reduced secured lending by $2.38 billion, and added 14 tons of physical gold. At the same time, our global user base continued to grow by more than 30 million users. These results show that Tether has the liquidity, discipline, and scale to remain resilient across market cycles while continuing to serve hundreds of millions of users around the world."
Gold now represents roughly 10% of Tether's $187.8 billion in reserves, underscoring bullion's importance as a strategic reserve asset alongside U.S. Treasuries. With more than 146 tonnes of gold, the stablecoin issuer now holds more bullion than many central banks.
According to the latest data from the World Gold Council, central banks purchased 289 tonnes of gold during the second quarter, up significantly from the revised first-quarter total of 57 tonnes. Tether's 14-tonne purchase represents nearly 5% of total official-sector gold demand during the quarter, highlighting the growing influence of digital asset firms in the physical bullion market.
Alongside gold, the company said its reserves remain centered on short-duration, high-quality liquid assets.
"The majority of reserves remain in U.S. government-backed instruments and short-term liquidity facilities, providing the liquidity needed to manage redemptions across different market conditions," the company said. “As a result, the Company remained one of the world's largest buyers and holders of U.S. Treasuries.”
