Tether's $1.45 Billion Gold Lease Financing Boosts Precious-Metals Presence

Tether, the issuer of the USDT stablecoin, has become a major player in the precious-metals finance market by providing $1.45 billion in lease financing to GoldExchange.com, a leading US dealer.

The arrangement allows GoldExchange.com to use physical gold held in reserve by Tether as an income-generating asset through gold leases carrying an annual rate of 1.75%. This rate is significantly lower than the roughly 6% cost of bank credit available to GoldExchange.com at the time.

Bloomberg reported that GoldExchange.com's precious-metals lease and advance balance tied to Tether rose to $1.45 billion at the end of June from $360 million at the end of March, nearly quadrupling in just three months.

Tether is also using these deals to turn physical gold held as reserve assets into income-generating assets. The company held more than 146 metric tons of physical gold as of the end of June, worth about $20 billion at current prices.