Tether, the company behind the world's largest stablecoin USDT, purchased approximately 6 metric tons of gold for its reserves in the first quarter of 2026, according to a Reuters report carried by CNA on May 1. That figure marks a steep drop from the 27 metric tons acquired in Q4 2025 and raises questions about whether the company is shifting strategy after a period of historic accumulation that placed it among the world's top 30 bullion holders.

The slowdown comes despite a quarter in which Tether posted $1.04 billion in net profit and pushed its excess reserve buffer to a record $8.23 billion, up from $6.3 billion at the end of 2025. Total assets reached $191.77 billion against liabilities of $183.54 billion, with USDT in circulation holding steady at roughly $183 billion as of March 31.

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From Aggressive Buyer to Cautious Holder

Tether had been one of the most active institutional gold buyers in the world throughout late 2024 and 2025. In Q3 and Q4 of last year, the company acquired approximately 26 and 27 metric tons respectively. In January 2026, CEO Paolo Ardoino indicated publicly that Tether intended to keep buying gold at a rate of up to two tons per week for at least the next few months. At gold prices near $5,000 per ounce, that pace translated to roughly $1 billion per month in purchases.

The Q1 total of just 6 metric tons falls well short of that stated target. Tether has not issued a specific public explanation for the change in pace. Tether did not respond to a request for comment.

A Jefferies analyst report from February 2026 estimated that by late January, Tether held approximately 148 metric tons of gold valued at around $23 billion, putting it ahead of sovereign gold holders including Australia, South Korea, Greece, the UAE, and Qatar. As of March 31, Tether's USDT reserves included an estimated 132 metric tons of gold worth approximately $19.8 billion at quarter-end prices.

The two figures are not directly comparable. The Jefferies estimate of 148 metric tons covers all of Tether's gold holdings as of January 31 and likely includes gold held as collateral for XAUT, Tether's gold-backed token. The March 31 figure, sourced to CoinDesk, refers specifically to gold backing USDT reserves. XAUT's market capitalization of approximately $2.7 to $2.9 billion at prevailing prices of around $5,000 per ounce represents roughly 17 to 18 metric tons, which accounts for nearly all of the apparent difference between the two figures. The available data does not indicate that Tether sold gold during the period.

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Where Tether's Reserves Actually Sit

Gold accounts for roughly 10 percent of USDT's investment portfolio, well within the 10 to 15 percent target Tether has publicly described. The dominant holding remains U.S. Treasury bills, both direct and through money market funds, totaling approximately $141 billion or about 74 percent of reserves. That scale makes Tether the 17th largest holder of U.S. government debt globally. Bitcoin holdings stand at approximately $7 billion, representing around 97,141 BTC.

The Treasury-heavy composition matters operationally: T-bills are highly liquid and can be sold quickly in a stress scenario. Physical gold stored in a former nuclear bunker in Switzerland, as Tether has described its storage arrangement, is considerably harder to mobilize, analysts note. Tether's Q1 profit was driven primarily by yield income on those Treasury holdings.

"Our responsibility is to make sure USD₮ works without compromise... it behaves the same way in any market condition, not just when things are stable," Ardoino said in Tether's official Q1 press release.

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What This Means for Users in Africa and South Asia

For a significant share of USDT users, concentrated not in the United States or Europe but in markets like Nigeria, Kenya, India, Pakistan, and Bangladesh, reserve composition is not an abstract question.

Nigeria alone recorded $92.1 billion in total on-chain cryptocurrency value in the 12 months to June 2025, according to Chainalysis data, making it Africa's largest crypto market. Across the continent, USDT is the primary tool for remittances and retail savings in markets where local currencies face persistent inflation. Traditional remittance corridors into Africa typically charge fees of 7 to 9 percent; USDT-based transfers can bring that cost down to 1 to 3 percent. Tether has also moved to deepen its institutional presence on the continent: in July 2025, the company signed a memorandum of understanding with Zanzibar's e-Government Authority (eGaz) to expand USDT and XAUT adoption, the most concrete example to date of Tether engaging African institutions directly.

South Asia is the fastest-growing region for crypto adoption in 2025. Regional crypto value rose roughly 80 percent year over year to approximately $300 billion, with USDT serving as the primary instrument for trade settlement and cross-border payments across key corridors in the region.

Analysts and commentators have described gold in Tether's reserves as a visible hedge against dollar debasement for users in these markets. A slower pace of accumulation, while offset by stronger overall reserves, means Tether is modestly reducing that hedge at a moment when gold is near historic highs.

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Looking Ahead

One regulatory deadline in particular could shape Tether's reserve strategy in coming months. The EU's MiCA regulatory framework (Markets in Crypto-Assets) requires major stablecoin issuers to hold 60 percent of reserves in European bank deposits, a rule that directly conflicts with Tether's current model. The transitional period ends July 1, 2026. Tether has already exited the euro stablecoin market in the EU, and USDT remains non-compliant with MiCA. USDT demand outside the EU, however, continues to grow.

Whether the gold slowdown reflects market timing at near-peak prices, a deliberate capital reallocation, or any consideration of regulatory optics ahead of that July deadline remains unclear. Ardoino has previously described ambitions for Tether to become what he called "the central bank of gold," and the company has hired two former senior HSBC gold traders to build out that capability. Whether Q1 represents a pause or a pivot will likely become clearer when Q2 attestation data is published.