Tether hires top HSBC gold trader, $12 billion gold reserves challenge traditional markets

On November 11, the stablecoin giant Tether Holdings SA announced the hiring of Vincent Domien, Global Head of Metals Trading at HSBC, and Mathew O’Neill, Head of Precious Metals Business for Europe, the Middle East, and Africa, to strengthen its precious metals trading team.

As of September, Tether’s gold reserves exceeded $12 billion, expanding rapidly at an average weekly addition of over 1 ton of gold, making it one of the largest holders of gold outside of banks and governments worldwide. With $180 billion in reserve assets, the company achieved a profit of $13 billion last year, with an expected increase to $15 billion in 2025, driven significantly by the strong rise in gold prices.

A New Case of Traditional Financial Elites Moving into the Crypto World

The recruitment of Vincent Domien and Mathew O’Neill marks a significant shift of traditional financial talent into the cryptocurrency sector. Domien currently serves as a director of the London Bullion Market Association (LBMA), a key organization setting standards for the global gold market. He joined HSBC from Société Générale in 2019 and was promoted to Global Head of Metals Trading in 2022; O’Neill has over 16 years of experience at HSBC, with deep expertise in the full chain of precious metals spot, futures, and storage businesses. Their simultaneous departure represents a major blow to HSBC’s precious metals division, especially in a market environment where gold has achieved its best annual performance since 1979.

In recent years, Tether has aggressively expanded into the precious metals sector. Besides directly holding physical gold, the company also owns approximately 1,300 gold bars through its gold stablecoin, Tether Gold (XAUT), with a circulating market value of $2 billion. According to Bloomberg estimates, over the past year until September, Tether has been adding over 1 ton of gold weekly, making it one of the most active buyers in the physical gold market. Additionally, the company has expanded its influence by investing in gold supply chain companies (such as rights gold companies), employing a vertical integration strategy similar to traditional gold banking.

Tether’s Gold Strategy and Synergy with Stablecoin Business

Tether’s gold reserves are a crucial component of its $180 billion in total reserves, underpinning its flagship product, USDT. Unlike competitors relying solely on U.S. Treasuries, Tether employs a diversified reserve strategy, with approximately 6.7% of assets allocated to gold. This approach yielded substantial returns in 2025 — gold prices surpassed $3,200 per ounce, rising 28% year-to-date, significantly boosting the overall yield of its reserves. Last year’s profit of $13 billion rivals top Wall Street investment banks, and the projected profit of $15 billion in 2025 is estimated to see about 20% contributed by gold.

Tether Gold (XAUT), as a differentiated product, offers a stablecoin fully backed 1:1 by physical gold. Holders can theoretically redeem for London Good Delivery gold bars, attracting investors seeking inflation hedges who prefer digital assets. Currently, about $2 billion worth of XAUT is in circulation, representing only 1.1% of USDT’s total, but with rapid growth — circulation increased by 80% in Q3 2025. This growth is partly driven by demand from emerging markets, especially in high-inflation countries like Argentina and Turkey, where local investors seek alternatives to preserve value outside of the U.S. dollar.

Key Data on Tether’s Gold Business

Reserves and Holdings

• Gold value: $12 billion (as of September 2025)
• Weekly gold addition: >1 ton
• XAUT circulation: $2 billion
• Corresponding gold bars: approximately 1,300

Financial Performance

• 2024 profit: $13 billion
• 2025 projected profit: $15 billion
• Gold allocation: approximately 6.7%
• Gold price increase YTD: 28%

Reshaping the Gold Market and the Trend Toward Digitization

Tether’s large-scale accumulation of gold is reshaping the physical gold market. According to the World Gold Council, in 2025, the share of “digital gold” in global gold demand rose to 4.2%, up from just 0.3% in 2020. Traditional gold banks like JPMorgan and HSBC are adjusting their business models, beginning to offer tailored services to crypto institutions, including physical gold custody and blockchain tokenization solutions. LBMA has even established a dedicated working group to develop industry standards for digital gold tokens.

This trend is driven by multiple factors: central banks’ continued gold purchases (net purchases of 800 tons in the first three quarters of 2025) pushing gold prices higher; younger generations’ natural preference for digital assets leading to tokenization of paper gold and gold ETFs; and geopolitical uncertainties accelerating capital flows from sovereign debt to non-sovereign stores of value. As a pioneer, Tether’s successful business model demonstrates the feasibility of combining “traditional reserve assets + blockchain technology,” providing a replicable template for other stablecoin issuers.

Investment Insights and Market Impact Analysis

For gold market participants, Tether’s rise signals structural changes. The premium for physical gold has widened due to increased institutional demand, with the London and New York gold price spread expanding from an average of 0.1% to 0.3%; gold lease rates have risen as lending of gold decreases, with six-month lease rates increasing from 0.5% to 1.2%; and the futures market’s term structure has steepened, reflecting expectations of tight spot markets. These changes create new arbitrage opportunities for traditional gold traders but also increase market volatility.

For crypto investors, Tether’s gold strategy offers important signals. First, stablecoin issuers are diversifying assets to enhance resilience, reducing systemic collapse risks; second, asset-backed stablecoins may become a new growth area, especially with innovative yield-generating products; third, the narrative of gold and Bitcoin as stores of value is not zero-sum — they may complement each other, forming a defensive asset mix against fiat devaluation. It is advisable to monitor cross-asset investment opportunities that involve both cryptocurrencies and gold.

Conclusion

Tether’s recruitment of traditional gold trading elites and its hundreds of billions of dollars in gold accumulation mark a shift where crypto-native companies are moving from challengers to market shapers. When stablecoin issuers become major holders of physical gold, the boundaries between traditional finance and the crypto economy further blur. This integration not only changes how both markets operate but could also redefine the form of value storage in the 21st century, creating unprecedented asset allocation possibilities for investors.