Tether Provides $1.45 Billion in Gold Financing to US Metals Distributor

Tether, the world's largest issuer of dollar-pegged stablecoins, has provided a $145 million financing arrangement to a major U.S. precious metals distributor, according to Bloomberg.

As reported by Bloomberg on July 17 (local time), Gold.com owed Tether $145 million in unpaid balances and advance payments as of June 30, representing most of the company's total $1.7 billion in outstanding precious metal leasing balances.

The transaction differs from conventional cash loans. Instead, Tether lends physical gold it holds, which Gold.com uses for business operations and returns at maturity with the same quantity and purity, plus a leasing fee.

A February agreement between Tether and Gold.com for a $10 million gold lease included an annual interest rate of 1.75%, significantly lower than Gold.com's typical bank credit cost of around 6%.

The balance related to Tether has grown from $36 million as of March 31 to nearly $145 million over just three months, a fourfold increase. Gold.com CEO Greg Roberts described the deal as "an opportunity to secure liquidity more cheaply than dollar credit facilities."

Tether is leveraging its physical gold reserves as an income-generating asset. As of June 30, Tether's held physical gold totaled over 146 tons, valued at approximately $2 billion based on current prices.

Bloomberg reported that Tether has also discussed potential financing arrangements with Swiss refining companies to expand its gold leasing business. Analysts suggest Tether is broadening its business scope by using its physical gold reserves as a foundation for the precious metals finance market.