Stablecoin issuer Tether is taking a step forward into the gold market, investing $150 million in Gold.com and snapping a 12 percent stake in the company.
The deal, announced on Friday, will see Tether expanding access to gold-backed stablecoin, XAU₮, to Gold.com’s platform, making it easier for users to access both digital and physical gold.
The alliance, which combines Tether’s stablecoin experience with Gold.com’s gold market knowledge, promises to make investing in and owning gold easier and simpler for investors.
The investment comes as the company tries to expand beyond its fiat-based stablecoins, providing customers with an opportunity to transcend the gap between the digital world of crypto and physical assets such as gold.
Tether’s CEO claimed the firm’s exposure to gold isn’t a trade, it’s a hedge and a long-term play to protect its users and the company as a whole in an increasingly unstable world. He further claimed XAU₮ was built around the ethos of the strength of gold combined with the efficiency of blockchain technology.
Terms of the deal
Tether and Gold.com are looking at ways for people to buy physical gold using digital currencies like Tether’s USD₮, the world’s largest stablecoin, and the newly launched, federally regulated USA₮, under the terms of the deal.
The idea behind the move is to make it easier for crypto users to turn digital assets into real, tangible gold.
However, it’s not quite as straightforward as flicking a switch, and any rollout will have to negotiate not only regulatory rules but also technical challenges and commercial considerations.
The companies are proceeding cautiously to ensure that the process is safe, reliable, and compliant, according to the official announcement.
The move comes at a time when the crypto market giants are looking towards bridging the gap between digital money and real-world assets.
“Gold has played a central role in preserving value for centuries, particularly during periods of monetary stress and geopolitical uncertainty,” said Paolo Ardoino, CEO of Tether.
Ardoino also stated, “Our investment in Gold.com reflects a long-term belief that gold should be as accessible, transferable, and usable as modern digital money, without compromising on physical backing or ownership.”
Interestingly, the deal comes just a day after Tether announced that it is investing nearly $100 million in Anchorage Digital, hinting at the expansionary policy of the firm.
Global gold market surge aids Tether’s deal
The news of the deal comes as global gold markets regain impetus, with prices recently exceeding $5,000 per ounce. The surge highlights gold’s significance as a store of wealth in the face of increased macroeconomic and geopolitical uncertainties.
The market for gold-backed stablecoins themselves has close to quadrupled this past year, rising from $1.3 billion up to more than $5.5 billion due to record gold costs and the rising need for on-chain safe havens.
Moreover, XAU₮ commands roughly 60 percent of the gold stablecoin market capitalisation worldwide. Tokenised gold is an emerging significant physical asset as managers and governments embrace the use of the blockchain to issue and hold it.