Tether Becomes Major Bullion Lender with $1.5 Billion Financing to Gold.com

Tether has emerged as a significant player in the bullion lending market, recently providing approximately $1.5 billion in financing to Gold.com. This move positions Tether as the dominant creditor behind Gold.com's $1.7 billion in outstanding precious-metal leases.

According to Gold.com's annual report, Tether was owed around $1.45 billion in payables and advances as of June. This financing follows Tether's earlier investment of $150 million for a 13% stake in Gold.com. Tether has also amassed one of the largest private gold reserves globally, holding 146 tons valued at about $20 billion as of June, following a substantial buying spree that outpaced many central banks.

The financing arrangement allows Tether to leverage its bullion holdings for returns, while Gold.com benefits from cheaper liquidity compared to traditional dollar facilities. The two companies have also agreed to mutual transactions involving precious metals and storage at Gold.com's Las Vegas facility.

Gold loans are essential in the physical bullion market, enabling refiners and jewelers to finance inventory without direct exposure to gold price fluctuations. A notable $100 million gold-leasing facility established between Tether and Gold.com in February featured an annual rate of 1.75%, significantly lower than the 6% rate of Gold.com's bank credit facility at that time.