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Why Tether Is Quietly Building a Gold Mining Empire

MarketDash Editorial Team
13 days ago
While Washington debates stablecoin regulations, the world's largest stablecoin issuer is deploying hundreds of millions into gold royalties—hard assets that sit outside the regulatory perimeter and can't be frozen with a phone call.

Tether (USDT) is making a move that deserves more attention than it's getting. While Congress hammers out stablecoin legislation and the Treasury Department puzzles over how to regulate foreign-issued digital dollars, Tether has quietly deployed over $300 million into gold royalties. These are hard assets that can't be frozen, can't be sanctioned, and sit comfortably outside the regulatory perimeter that's closing in on traditional stablecoin reserves.

The numbers are striking. Tether now owns nearly a third of Elemental Altus Royalties (ELEMD), holds significant stakes in Versamet Royalties (VRMTD) and Versamet (VRMTF), plus Metalla Royalty & Streaming (MTA). Together, these positions give Tether claims on hundreds of gold mines across four continents.

This isn't portfolio diversification for its own sake. Tether is betting that the future of money involves gold, and it's building infrastructure that could either power the next generation of stablecoins or provide an escape route if regulators slam the door on dollar-backed models.

The Profit Machine That Needs an Exit Strategy

To understand what's happening here, you need to grasp the scale of Tether's profit engine. With more than $100 billion in USDT backed primarily by short-term U.S. Treasuries, the company pulls in an estimated $5 to $6 billion annually in interest income. That's more profit than most blue-chip financial institutions and several multiples of what the largest publicly listed gold royalty company earns.

But every Treasury bill Tether buys also increases its vulnerability. If the U.S. government decides it doesn't like offshore stablecoins, it can freeze or restrict access to those assets with a phone call. The 2022 Russian sanctions demonstrated how quickly that can happen. Reserves parked inside the Western financial system aren't as safe as they once seemed, especially for companies operating in regulatory gray zones.

Gold royalties solve that problem in an elegant way. Instead of owning and operating mines, royalty companies finance mining projects in exchange for a percentage of future revenue or the right to purchase metal at a discount. Once production starts, they collect cash without dealing with labor disputes, equipment failures, or environmental lawsuits. The miner assumes the operational risk while the royalty holder gets paid.

Elemental Altus, where Tether now holds approximately 32 percent of shares, manages more than 200 royalty and streaming contracts, most tied to precious metals. This year the company reported that revenue more than doubled and operating cash flow jumped nearly tenfold as several projects transitioned from development into full production. Versamet, Tether's second-largest position at 12.7 percent, is targeting more than 20,000 gold-equivalent ounces of annual production by next year. Metalla brings another 100-plus royalties, including exposure to some of the world's longest-life gold projects.

For Tether, these investments accomplish more than diversification. They convert a chunk of dollar-denominated interest income into inflation-sensitive, gold-linked cash flows that sit outside the reach of U.S. regulators.

The Regulatory Countdown

The timing here matters because the rules are changing fast. Earlier this year, the United States passed its first federal framework for stablecoins. Under the new law, reserves must be held in cash, Treasury bills, bank deposits, or money market funds. Gold doesn't qualify. Neither do mining royalties.

At first glance, that seems to eliminate any plan to use these royalty stakes as stablecoin backing. But Tether isn't a U.S. company. It operates from El Salvador and treats USDT as an offshore product, while preparing a separate, compliant stablecoin for the American market.

The interesting loophole lies in how the law treats foreign issuers. There's a "reciprocal treatment" clause that could allow stablecoins from jurisdictions with comparable regulations to operate in the United States without full domestic licensing. The problem is that nobody knows yet which countries will qualify or when those determinations will be made.

Most policy observers expect clarity by mid-2026, with potential enforcement actions following within roughly 18 months. If the Treasury Department decides that El Salvador's regulatory framework doesn't measure up, U.S. exchanges and banks could be forced to phase out USDT trading pairs. That would cut Tether off from the world's largest crypto market and crater demand for the token.

In that scenario, Tether's gold royalty portfolio stops looking like a side project and starts looking like essential infrastructure. By building a separate investment arm with exposure to hard assets and commodity-linked income, Tether is preserving the option to launch gold-backed or hybrid stablecoins that don't depend solely on dollar reserves. If USDT gets boxed out of the United States, Tether will already own the infrastructure it needs to pivot.

Central Banks Are Already Pivoting to Gold

Tether's move also aligns with a broader shift in how money is stored and moved around the world. Over the past few years, central banks led by China, Turkey, India, and Russia have been net buyers of gold on a scale not seen in decades. Those purchases helped push gold above $4,000 an ounce earlier this year, a record high that has held even as equities chopped sideways and bonds sold off.

This pattern looks less like a typical inflation hedge or recession trade and more like a structural change in how reserves are managed. Emerging-market governments are actively reducing their reliance on the dollar, and gold is the obvious alternative. It's neutral, liquid, and cannot be frozen by Washington.

At the same time, governments are starting to experiment with digital gold. Kyrgyzstan launched a state-backed, gold-collateralized digital currency just weeks ago. The project is small, but it proves the concept: policymakers are willing to combine the credibility of gold with the convenience of tokenized payments.

That's the market Tether seems to be positioning for. If regulators eventually allow large-scale gold-backed stablecoins, the winner won't necessarily be the issuer with the loudest marketing campaign. It's more likely to be the one that already controls diversified, reliable sources of gold-linked cash flow and has proven experience managing billions of dollars in tokenized liabilities.

Tether is building that position now. Instead of buying bullion and locking it in a vault, it's buying into the revenue streams from dozens of producing mines. That gives it leverage to both the gold price and to production growth, without the headaches of actually running a mining company.

Three Names Getting Attention

So what does this mean for anyone putting capital to work?

The most direct way to express this theme is through the royalty stocks that Tether has backed. Elemental Altus Royalties (TSX-V: ELE) is the flagship position, with Tether holding nearly a third of the company. Versamet Royalties (TSX-V: VMET) announced its Tether partnership in November and the stock jumped on the news as analysts scrambled to update coverage. Metalla Royalty & Streaming (MTA) is the most liquid of the three and trades on major North American exchanges with a market capitalization in the hundreds of millions.

These are not stable, dividend-paying blue chips. They're small-cap royalty platforms with thin daily volume. When news hits—whether a new deal, an upgraded forecast, or another Tether stake increase—prices can move quickly. The flip side is obvious: spreads are wide, liquidity dries up in risk-off environments, and exits can be messy. If you're going to trade these names, position size and discipline around stops matter.

Beyond the individual stocks, Tether's behavior is a useful signal for understanding where gold and stablecoins are heading. Central banks are buying. Governments are experimenting with tokenized gold. And now the largest private stablecoin issuer is directing hundreds of millions into the royalty sector. Taken together, those moves point toward an expanded role for gold in the global financial system rather than a shrinking one.

The regulatory angle adds another layer. Any public statement from the U.S. Treasury, the Federal Reserve, or European regulators about foreign stablecoin frameworks will move these names. A tough stance on El Salvador's regime could hit anything connected to Tether, at least in the short term. A more permissive interpretation would buy Tether years to keep building, and the royalty stocks would likely reprice higher as that timeline extends.

Reading the Signal

Tether's pivot into gold royalties goes well beyond publicity. The company is hedging against a future in which dollar-backed stablecoins face growing regulatory pressure and gold plays a larger role in both traditional finance and digital money.

For traders, the takeaway isn't to buy every gold stock Tether touches. The point is that when a company sitting on $100 billion in liabilities and generating billions a year in profit starts redirecting that capital into hard-asset cash flows, it's worth asking why. Tether appears to be preparing for a world where stablecoins need more than short-term Treasuries to survive and where the line between digital assets and commodity backing becomes much thinner.

Whether you trade gold, crypto, or the intersection of both, that shift is already underway. The open question is how quickly it accelerates and whether you'll be positioned when it does.

Back to News

Why Tether Is Quietly Building a Gold Mining Empire

MarketDash Editorial Team
13 days ago
While Washington debates stablecoin regulations, the world's largest stablecoin issuer is deploying hundreds of millions into gold royalties—hard assets that sit outside the regulatory perimeter and can't be frozen with a phone call.

Tether (USDT) is making a move that deserves more attention than it's getting. While Congress hammers out stablecoin legislation and the Treasury Department puzzles over how to regulate foreign-issued digital dollars, Tether has quietly deployed over $300 million into gold royalties. These are hard assets that can't be frozen, can't be sanctioned, and sit comfortably outside the regulatory perimeter that's closing in on traditional stablecoin reserves.

The numbers are striking. Tether now owns nearly a third of Elemental Altus Royalties (ELEMD), holds significant stakes in Versamet Royalties (VRMTD) and Versamet (VRMTF), plus Metalla Royalty & Streaming (MTA). Together, these positions give Tether claims on hundreds of gold mines across four continents.

This isn't portfolio diversification for its own sake. Tether is betting that the future of money involves gold, and it's building infrastructure that could either power the next generation of stablecoins or provide an escape route if regulators slam the door on dollar-backed models.

The Profit Machine That Needs an Exit Strategy

To understand what's happening here, you need to grasp the scale of Tether's profit engine. With more than $100 billion in USDT backed primarily by short-term U.S. Treasuries, the company pulls in an estimated $5 to $6 billion annually in interest income. That's more profit than most blue-chip financial institutions and several multiples of what the largest publicly listed gold royalty company earns.

But every Treasury bill Tether buys also increases its vulnerability. If the U.S. government decides it doesn't like offshore stablecoins, it can freeze or restrict access to those assets with a phone call. The 2022 Russian sanctions demonstrated how quickly that can happen. Reserves parked inside the Western financial system aren't as safe as they once seemed, especially for companies operating in regulatory gray zones.

Gold royalties solve that problem in an elegant way. Instead of owning and operating mines, royalty companies finance mining projects in exchange for a percentage of future revenue or the right to purchase metal at a discount. Once production starts, they collect cash without dealing with labor disputes, equipment failures, or environmental lawsuits. The miner assumes the operational risk while the royalty holder gets paid.

Elemental Altus, where Tether now holds approximately 32 percent of shares, manages more than 200 royalty and streaming contracts, most tied to precious metals. This year the company reported that revenue more than doubled and operating cash flow jumped nearly tenfold as several projects transitioned from development into full production. Versamet, Tether's second-largest position at 12.7 percent, is targeting more than 20,000 gold-equivalent ounces of annual production by next year. Metalla brings another 100-plus royalties, including exposure to some of the world's longest-life gold projects.

For Tether, these investments accomplish more than diversification. They convert a chunk of dollar-denominated interest income into inflation-sensitive, gold-linked cash flows that sit outside the reach of U.S. regulators.

The Regulatory Countdown

The timing here matters because the rules are changing fast. Earlier this year, the United States passed its first federal framework for stablecoins. Under the new law, reserves must be held in cash, Treasury bills, bank deposits, or money market funds. Gold doesn't qualify. Neither do mining royalties.

At first glance, that seems to eliminate any plan to use these royalty stakes as stablecoin backing. But Tether isn't a U.S. company. It operates from El Salvador and treats USDT as an offshore product, while preparing a separate, compliant stablecoin for the American market.

The interesting loophole lies in how the law treats foreign issuers. There's a "reciprocal treatment" clause that could allow stablecoins from jurisdictions with comparable regulations to operate in the United States without full domestic licensing. The problem is that nobody knows yet which countries will qualify or when those determinations will be made.

Most policy observers expect clarity by mid-2026, with potential enforcement actions following within roughly 18 months. If the Treasury Department decides that El Salvador's regulatory framework doesn't measure up, U.S. exchanges and banks could be forced to phase out USDT trading pairs. That would cut Tether off from the world's largest crypto market and crater demand for the token.

In that scenario, Tether's gold royalty portfolio stops looking like a side project and starts looking like essential infrastructure. By building a separate investment arm with exposure to hard assets and commodity-linked income, Tether is preserving the option to launch gold-backed or hybrid stablecoins that don't depend solely on dollar reserves. If USDT gets boxed out of the United States, Tether will already own the infrastructure it needs to pivot.

Central Banks Are Already Pivoting to Gold

Tether's move also aligns with a broader shift in how money is stored and moved around the world. Over the past few years, central banks led by China, Turkey, India, and Russia have been net buyers of gold on a scale not seen in decades. Those purchases helped push gold above $4,000 an ounce earlier this year, a record high that has held even as equities chopped sideways and bonds sold off.

This pattern looks less like a typical inflation hedge or recession trade and more like a structural change in how reserves are managed. Emerging-market governments are actively reducing their reliance on the dollar, and gold is the obvious alternative. It's neutral, liquid, and cannot be frozen by Washington.

At the same time, governments are starting to experiment with digital gold. Kyrgyzstan launched a state-backed, gold-collateralized digital currency just weeks ago. The project is small, but it proves the concept: policymakers are willing to combine the credibility of gold with the convenience of tokenized payments.

That's the market Tether seems to be positioning for. If regulators eventually allow large-scale gold-backed stablecoins, the winner won't necessarily be the issuer with the loudest marketing campaign. It's more likely to be the one that already controls diversified, reliable sources of gold-linked cash flow and has proven experience managing billions of dollars in tokenized liabilities.

Tether is building that position now. Instead of buying bullion and locking it in a vault, it's buying into the revenue streams from dozens of producing mines. That gives it leverage to both the gold price and to production growth, without the headaches of actually running a mining company.

Three Names Getting Attention

So what does this mean for anyone putting capital to work?

The most direct way to express this theme is through the royalty stocks that Tether has backed. Elemental Altus Royalties (TSX-V: ELE) is the flagship position, with Tether holding nearly a third of the company. Versamet Royalties (TSX-V: VMET) announced its Tether partnership in November and the stock jumped on the news as analysts scrambled to update coverage. Metalla Royalty & Streaming (MTA) is the most liquid of the three and trades on major North American exchanges with a market capitalization in the hundreds of millions.

These are not stable, dividend-paying blue chips. They're small-cap royalty platforms with thin daily volume. When news hits—whether a new deal, an upgraded forecast, or another Tether stake increase—prices can move quickly. The flip side is obvious: spreads are wide, liquidity dries up in risk-off environments, and exits can be messy. If you're going to trade these names, position size and discipline around stops matter.

Beyond the individual stocks, Tether's behavior is a useful signal for understanding where gold and stablecoins are heading. Central banks are buying. Governments are experimenting with tokenized gold. And now the largest private stablecoin issuer is directing hundreds of millions into the royalty sector. Taken together, those moves point toward an expanded role for gold in the global financial system rather than a shrinking one.

The regulatory angle adds another layer. Any public statement from the U.S. Treasury, the Federal Reserve, or European regulators about foreign stablecoin frameworks will move these names. A tough stance on El Salvador's regime could hit anything connected to Tether, at least in the short term. A more permissive interpretation would buy Tether years to keep building, and the royalty stocks would likely reprice higher as that timeline extends.

Reading the Signal

Tether's pivot into gold royalties goes well beyond publicity. The company is hedging against a future in which dollar-backed stablecoins face growing regulatory pressure and gold plays a larger role in both traditional finance and digital money.

For traders, the takeaway isn't to buy every gold stock Tether touches. The point is that when a company sitting on $100 billion in liabilities and generating billions a year in profit starts redirecting that capital into hard-asset cash flows, it's worth asking why. Tether appears to be preparing for a world where stablecoins need more than short-term Treasuries to survive and where the line between digital assets and commodity backing becomes much thinner.

Whether you trade gold, crypto, or the intersection of both, that shift is already underway. The open question is how quickly it accelerates and whether you'll be positioned when it does.