Tether, the issuer of the USDT stablecoin, is hiring two metals trading veterans from HSBC. This strategic action occurs as Tether targets the gold market and the price of the precious metal trades above $4,100 per ounce. According to recent reports, the executives are already serving their notice periods before joining the firm.
The executives are Vincent Domien, HSBC’s global head of metals trading and a board member of the London Bullion Market Association (LBMA), and Mathew O’Neill, head of precious metals origination for Europe, the Middle East, and Africa. Their addition aims to internalize bullion execution and sourcing for Tether. As of the end of September, Tether’s reserve reports already showed over $12 billion in gold.
Furthermore, HSBC operates one of the world’s largest precious metals franchises, spanning futures, global logistics, and vaulting services. Hiring figures of this caliber is a strategic move for Tether. This allows the firm to build internal execution capabilities, rather than relying solely on external dealers. Therefore, it could change how the company manages its gold purchases, hedging, and settlements.
How does this gold strategy impact USDT and XAUT reserves?
It is crucial to differentiate the gold in USDT reserves from the Tether Gold (XAUT) token. The company has nearly $2 billion of XAUT in circulation, which is backed by approximately 1,300 specific, allocated gold bars. The $12+ billion in gold reported in Tether’s general reserves is a separate asset backing the main stablecoin, USDT, alongside U.S. Treasuries.
This expansion into metals introduces new custody and transport considerations. The current global economy, marked by central bank buying, has fueled the gold rally. The entry of a large non-bank buyer like Tether can influence flows in the bullion market, especially now that Tether targets the gold market more directly.
Future reserve attestations from Tether will show if the allocation to precious metals continues to grow. The integration of the HSBC executives will be key to managing the company’s liquidity and risk controls. The market will closely watch how these moves affect the composition and transparency of the reserves backing the world’s largest stablecoin.
