Stablecoin issuer Tether holds 116 tonnes of physical gold, placing it on par with central banks such as those in South Korea, Hungary and Greece.

Tether is “the largest holder of gold outside central banks,” Jefferies wrote in a recent analysis, per a report by the Financial Times. The banking giant added that Tether’s growing appetite for gold may be playing a far larger role in the metal’s recent surge than previously assumed.

According to Jefferies, Tether’s gold purchases last quarter accounted for nearly 2% of total global gold demand and almost 12% of central bank purchases. The firm said that Tether’s aggressive accumulation over the past two months “is likely to have tightened supply in the short term and influenced sentiment,” potentially driving speculative inflows into gold markets.

Investors cited by Jefferies believe Tether aims to acquire another 100 tonnes of gold in 2025. With the company reportedly on track for $15 billion in profit this year, the target appears well within reach, according to the report.

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Tether doubles down on gold strategy

Tether has also spent more than $300 million this year buying stakes in precious-metal producers. In June, it acquired a 32% stake in Canada’s public gold royalty firm Elemental Altus Royalties.

In September, the FT reported that Tether is exploring investments across the gold supply chain, including mining, refining, trading and royalty companies, as part of a broader push to diversify its reserves.

Tether also issues Tether Gold (XAUt), its gold-backed token launched in 2020 and advertised as being supported by bullion stored in a Swiss vault. Blockchain data shows XAUt issuance has doubled over the past six months, with Tether adding 275,000 ounces (about $1.1 billion) since August.

Jefferies believes Tether is betting that tokenised gold will finally find traction. Physical gold is cumbersome for retail investors, futures carry roll costs, and gold ETFs charge relatively high fees. Tether argues that tokenisation solves these frictions.

Related: Tether denies Bitcoin sell-off rumors, confirms buying BTC, gold, land

Tether increasingly resembles a central bank

As Cointelegraph reported, Tether’s day-to-day operations mirror several core functions traditionally associated with central banks. It mints and redeems USDt (USDT) directly for verified customers, effectively expanding or contracting supply through its primary market pipeline.

It also manages a large reserve portfolio dominated by short-duration US Treasurys, along with gold and Bitcoin (BTC). The company also generates central bank–like income by earning interest on those Treasurys while issuing a non-interest-bearing token.