Tether has announced that its tokenized gold product (XAU₮) is now backed by 11.6 tonnes of physical gold, equivalent to roughly 375,000 troy ounces. This additional metal was added during the July-September period, coinciding with a significant rise in gold prices. This reserve expansion forces institutional desks, product developers and compliance officers to reevaluate the largest on-chain claim to gold.
Each XAU₮ token represents a direct claim to one troy ounce of gold stored in Swiss vaults under the London Good Delivery standard. Quarterly verifications carried out by BDO Italy and Moore Cayman document bar numbers, weights and purity, information that is published on the token’s official page. The increase in reserves to 11.6 tonnes coincides with a 46% rise in the price of gold since January 2025, driven by inflation concerns, wartime conflicts and strong retail demand in China.
Tokenization essentially converts warehouse receipts into ERC-20 units that operate on public blockchains. Tether’s treasury team treats its gold reserve as a hedge, similar to its Bitcoin holdings. CEO Paolo Ardoino has reiterated that both gold and Bitcoin function as a store-of-value shield for the company’s balance sheet. Operations with these tokens settle in minutes, replacing armored transport costs with gas fees.
Implications for institutions and developers
With roughly $1.5–2 billion of gold converted into tokens, this reserve increase allows large buyers or sellers to operate without affecting the price. This market depth attracts hedge funds and family offices that would normally avoid OTC trading. However, although auditors confirm the existence of the bars, the names of the vaults and the exact addresses remain secret, which requires compliance teams to request bar lists, insurance programs and sub-custody agreements.
The supply of tokenized has grown 85% in twelve months, pressuring competitors to demonstrate their own metal reserves. Quarterly verifications with numbered bars have become the minimum entry requirement for integration with brokers and regulators. The next certification in December is expected to update the bar list and confirm whether Tether continued accumulating ounces during the fall.
