The company behind the USDT stablecoin is storing $8 billion in gold in a secret Swiss vault

Tether Holdings SA, the issuer of the world's largest stablecoin USDT, said it holds $8 billion in gold reserves in a private vault in Switzerland, making the company one of the largest non-state holders of the precious metal in the world, Bloomberg reports.

The El Salvador-registered cryptocurrency company said it currently owns nearly 80 tons of gold, most of which is owned directly by Tether, rather than collateralizing its gold-pegged tokens.

Tether issues USDT, a stablecoin pegged to the US dollar, with a total issuance of $159 billion. The company makes money by investing collateral in assets such as US Treasury bonds. Precious metals make up about 5% of its reserves, according to a March report.

Tether's $8 billion in gold and currency reserves are comparable to the total value of precious metals and raw materials held by UBS Group AG, one of the few major banks to publish such information.

The rapid growth of stablecoins has drawn the attention of regulators, concerned that they could allow the transfer of vast sums of money outside the traditional banking system. Current and proposed regulations in the EU and the US allow stablecoin reserves only in the form of cash or cash equivalents, excluding gold.

Under such rules, Tether would have to sell its gold reserves to obtain permission to operate in these jurisdictions.