Stock image.
Stablecoin issuer Tether Holdings SA is expanding its gold strategy by adding to its stake in a Canadian gold royalty company.
Tether plans to buy approximately $100 million in additional shares of Elemental Altus Royalties Corp., a firm that specializes in buying revenue streams from mining companies, according to a statement. Tether had already amassed a 37.8% stake earlier this year, a filing in June showed.
The Financial Times also reported that Tether has also held discussions with multiple mining and investment firms over opportunities including gold mining, refining, trading and royalties. Representatives for Tether didn’t return a request for comment.
The move comes amid surging interest in gold, with prices soaring to fresh all-time highs above $3,550 an ounce, on speculation that US interest-rate cuts will fan inflation. Bitcoin has been likened to “digital gold” by some investors, including Tether, because it’s seen as a similar store of value and scarce resource.
“Tether’s recent investment in Elemental Altus was based on its strategy of increasing gold exposure,” said Juan Sartori, executive chairman of Elemental Altus. The deal, which is subject to shareholder approval, is expected to close in the fourth quarter.
Tether is the issuer of the world’s largest stablecoin USDT, a cryptocurrency that aims to maintain a one-to-one peg to the US dollar by relying on a reserve of assets, including gold. The company had amassed a stockpile of around $8.7 billion in physical gold bars as of the end of June, stored in a secret Swiss vault.
Tether also offers a 100% gold-backed token, XAUT. Tokens can be redeemed for physical gold, collected directly in Switzerland. The company has issued approximately $1.3 billion worth of XAUT to date, according to its website.
(By Emily Nicolle)
