Tether Enters Gold Leasing Business with $1.45 Billion Financing Deal
Tether, the world's largest dollar stablecoin issuer, has expanded its gold holdings into a 'gold leasing' business. This move marks an opportunity for Tether to monetize its massive gold reserves, which now exceed 146 tonnes worth around $20 billion.
The company lent out approximately $1.45 billion in physical gold to Gold.com, a major U.S. precious metals distributor. This amount accounts for the majority of Gold.com's total precious metals lease balance of $1.7 billion.
The transaction structure differs from a conventional cash loan. Tether lends out its physical gold holdings, Gold.com uses the gold in its business operations, and at maturity returns the same quantity and purity of gold while paying a lease fee. The annual rate for this agreement is 1.75%, significantly lower than the 6% costs associated with raising dollars through bank credit facilities.