Tether has expanded the use of its $23 billion gold reserves by bringing its tokenized product Tether Gold (XAUT) to crypto lender Ledn.
Ledn said it is adding support for XAUT, alongside bitcoin BTC$60,603.09 and Tether’s stablecoin $USDT, with borrowing against XAUT expected later this year.
Tether is attempting to monetize what has become one of the world’s largely privately held gold reserves. The stablecoin company says it holds around $23 billion worth of physical bullion backing XAUT, with each token representing one troy ounce of gold stored in vaults in Switzerland.
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 physical bitcoin as digital collateral, unlocking liquidity without having to sell it.
This follows the model Ledn has used for bitcoin-backed loans for several years. Client collateral continues to be held 1:1, without being lent out or used to generate yield, Ledn said, seeking to draw a line between the services it offers and those of its former rivals that went to the wall in the crypto winter of 2022.
“As digital assets become an increasingly important part of the global economy, demand is growing for solutions that combine long-term ownership with financial flexibility,” Tether CEO Paolo Ardoino said in a statement.
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. The company has spent the past few years reshaping itself into a broader technology and infrastructure group spanning finance, energy and AI.
A key part of that strategy has been building a substantial gold business. Alongside growing XAUT, Tether has accumulated roughly 140 metric tons of physical bullion, making it one of the world’s largest corporate gold holders. 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.
Beyond precious metals, Tether has invested in bitcoin mining and renewable energy projects, while backing AI infrastructure provider Northern Data and as part of a broader push into computing technologies.