Paolo Ardoino said Tether wanted to allocate 10% to 15% of its own $20 billion investment portfolio to physical gold. Two days later, Tether reported more than $10 billion in profits for 2025 and $6.3 billion in excess reserves.
The company had already poached two precious metals traders from HSBC to build what Ardoino publicly called “the best gold trading floor in the world.”
The traders were Vincent Domien, HSBC’s former global head of metals trading and a board member of the London Bullion Market Association, and Mathew O’Neill, who oversaw precious metals production in Europe, the Middle East and Africa.
Tether acted like a balance sheet empire builder, expanding its reserve footprint and cultivating the image of an institution capable of competing directly with JPMorgan and HSBC in the gold markets.
By March 31, Tether had rejected both. Reports confirmed the cuts just three months after they took effect, with gold on track for a monthly decline of 12.7%, its steepest decline since October 2008.
In addition to an investment-level leadership reset, a formal Big Four audit assignment and a reported fundraising lull, the layoffs take on different weight.
The move appears to be an intentional redrawing of what Tether wants to look like before it is inspected.
The audit hub
Tether’s March 24 announcement that it had formally engaged a Big Four firm for its first full audit of its financial statements contained specific language.
The company said the process would go beyond the attestation standard used for stablecoins, covering reserve optimization, internal controls and financial reporting.
On the same day, Tether set a planned increase of up to $20 billion until the audit was completed, with potential investors and bankers pushing for more transparency. By March 12, CIO Richard Heathcote had already stepped down from his day-to-day duties and deputy Zachary Lyons took over.
There is a broader timeline of Tether’s movements this year.
Launch of USAT on January 27, gold allocation ambitions announced on January 28, earnings announcement on January 30, transition to investment leadership on March 12, Big Four audit announced on March 24, fundraising pause on the same day, expansion of XAUT to BNB Chain on March 26, and gold agency layoffs on March 31.
These moves trace a company reorganizing around a single internal priority: making the reserve perimeter legible, clearly separating the non-reserve portfolio, and achieving a simpler audit process than in early 2026.
Tether still held about 130 tons of physical gold at the end of 2025, and four days before making agency cuts, it expanded XAUT to BNB Chain, noting that the tokenized gold market had grown from about $1.3 billion to more than $4 billion by 2025, with XAUT controlling about 60% of that market.
Tether said it was still building a “state-of-the-art gold team,” optimizing operations and repositioning gold from an expansion symbol to a reserve asset and tokenized product.
The reveal race
Circle has been using disclosure as a competitive weapon for years.
| Metric | Tether/USDT | Circle / USDC |
|---|---|---|
| Circulation / market capitalization | $184 billion+ | $77 billion+ |
| The cadence of disclosure | Certificates; is now moving to full audit | Weekly disclosure of reserves |
| External security | Full audit of Big Four announced | Big Four Monthly Reserve Guarantee |
| Reserve story | Large-scale, broader reserve/perimeter questions | A simpler pitch for institutional disclosure |
| Strategic issue in article | Credibility gap despite dominance | Disclosure used as a competitive weapon |
USDC has over $77 billion in circulation as of end-March 31, publishes reserve data weekly and receives monthly reserve guarantees from a Big Four firm.
Tether’s USDT was over $184 billion and coexisted with a persistent credibility gap that Circle’s institutional pitch leverages in corporate sales cycles. By committing to a full audit of its financial statements instead of ongoing attestations, Tether aims to close that gap without giving up its volume dominance.
The timing follows a legal deadline. The OCC’s proposed GENIUS Act rules, which were circulated in February 2026, explicitly address reserves, redemption standards, risk management, audits, and financial reporting, including examination of foreign issuers.
The new regulations require end-to-end parsability of a stablecoin issuer’s reserve system and governance. Tether’s March 24 announcement, tailored to both Circle’s disclosure push and the reality that USDT’s $184 billion size makes it a regulatory target regardless of management preference, reads like a direct response to that standard.
Reuters noted that Tether’s equity as a share of assets fell to 3.3% at the end of 2025, while cash reserves fell to 76% of assets. Meanwhile, stocks like Bitcoin, gold and secured loans rose up to 24%.
Tether disclosed $6.3 billion in excess reserves against about $186.5 billion in liabilities, a cushion of about 3.4%. At that margin, a full audit carries solvency optical weight for a company, holding back the dominant quote currency in crypto trading pairs and serving over 550 million users.
The Federal Reserve published a note on March 30 saying that payment stablecoins could impact liquid asset markets, bank reserve balances and the implementation of monetary policy.
IMF research shows that a 1% increase in the combined USDC and USDT market capitalization reduces the 1-month T-bill yield by 1.9 basis points at the trough, while a BIS/IMF paper shows that more than 70% of cumulative net stablecoin inflows came from non-USD currencies.
Tether’s attempt to harden its books comes just as USDT is attracting the attention of central banks and crypto markets alike.
Potential outcomes
If the process is completed without material complexity in the reserve or affiliated entity structure, Tether will reopen its fundraising with a disclosure profile closer to Circle’s, expand institutional access to USDT, and reframe gold agency cuts as the kind of operational decision a mature financial infrastructure provider makes.
Goldman Sachs predicted that the gold price would reach $5,400 per ounce by the end of 2026. If prices recover, XAUT will benefit from the upside, while the physical Tether cut will become a sunk cost.
The company will have traded a few months of Empire Optics for something more sustainable: the right to be priced as a controlled infrastructure rather than a crypto-native operator running on goodwill and quarterly attestations.
| Scenario | Tractor | What changes for Tether | What it means for crypto markets |
|---|---|---|---|
| Bull case: clean audit | No material reserve or complexity of affiliated entities | Fundraising reopens; disclosure profile moves closer to Circle; gold desk cuts look disciplined | USDT Gains Institutional Credibility; the reserve debate cools down |
| Bear case: long-term audit | Audit/classification/documentation issues delay completion | Fundraising remains suspended; The investigation into the composition of the reserves continues | Rivals gain narrative ground; every move of BTC/gold revives the credibility issues |
The bear case is a lengthy audit. Control or classification issues in its $20 billion proprietary portfolio, formally separated from USDT reserves but routed through affiliated entities requiring clean documentation, are delaying completion and fundraising remains shelved.
Any price movement in Bitcoin or gold reopens the debate over the composition of reserves in a news cycle that Tether can no longer contain with an attestation update.
The 3.4% equity cushion leaves little room for narrative shifts, and each quarter without a completed audit increases the opportunity for rivals to claim the credibility ground Tether vacated by inviting the inspection before the results arrived.
The company that built the world’s most consistent stablecoin is now betting that appearing controllable is worth more than appearing ambitious.