Scattered across Switzerland are approximately 370,000 nuclear bunkers, most of which are idle relics from the Cold War era. However, one such facility is exceptionally active, receiving over a ton of gold shipments into its highly secured vaults each week.

The owner of this vault is cryptocurrency giant Tether Holdings SA, which has now emerged as the largest known holder of gold reserves outside of global banks and sovereign nations.

Over the past year, Tether has quietly ascended to become one of the most significant players in the global gold market. This development signifies a convergence of the cryptocurrency and gold worlds, both driven by a shared underlying force—distrust in government debt—which is also a key factor behind gold's surge to historic highs above $5,100 per ounce.

Yet, very little is known about its internal operations or gold strategy. When two senior gold traders from leading precious metals bank HSBC Holdings Plc departed last year, industry speculation about their destination was rampant, but almost no one guessed the answer would be Tether.

In an interview, Tether CEO Paolo Ardoino likened the company's role in the gold market to that of a central bank and predicted that geopolitical rivals of the United States would launch a gold-backed alternative to the dollar. He revealed the company plans to continue investing its massive profits into gold while beginning to compete with banks in trading the metal.

"We will soon be one of the largest... gold central banks in the world," he stated.

Even during this historic period for the gold market, Tether's moves stand out. Based on calculations, the company has dramatically accelerated its purchasing pace, buying over 70 tons of gold last year for its reserves and its own gold-backed stablecoin.

This volume exceeds the reported purchases of almost any single central bank: only Poland (which increased its reserves by 102 tons) announced larger acquisitions. Excluding the top three Exchange-Traded Funds (ETFs)—which represent the collective activity of thousands of individual traders and investors—this also surpasses the buying of any other entity.

"This is a James Bond-style place," Ardoino remarked, describing their former nuclear bunker vault in Switzerland.

The company currently holds approximately 140 tons of gold, most of which, according to Ardoino, comprises its own reserves and the bullion backing its gold token. Valued at around $23 billion, this is the largest known gold hoard outside of central banks, ETFs, and the commercial bank vaults underpinning major trading hubs.

And the figure is growing: Ardoino stated that Tether has been purchasing gold at a rate of about 1 to 2 tons per week and intends to continue doing so "for the next few months."

"Then of course, we will decide based on market conditions, but I think we will continue in this direction," the CEO added. When asked if Tether would reduce its gold purchases at some point, Ardoino said, "We might reduce, but it's not certain yet. We assess the demand for gold quarterly."

Tether generates revenue through its dollar stablecoin, USDT, an industry behemoth with a circulating supply of $1.86 trillion. The company receives real US dollars to issue USDT tokens and invests these in US Treasury bonds and other assets like gold, earning billions in interest and trading profits.

Ardoino emphasized that holding physical gold is so crucial that the company has taken extraordinary measures, storing the bullion in the former Swiss nuclear bunker guarded by multiple layers of heavy steel doors.

The secrecy inherent to the gold market means that while it's easy to describe broad investment drivers, pinpointing exactly who is behind purchases is difficult. For instance, China officially disclosed purchases of only 27 tons last year, though many traders believe its actual buying was far greater.

Tether's disclosed purchasing volume is so substantial that some market observers have already pointed to its role in influencing global gold prices.

Analysts at investment bank Jefferies noted in a report that these purchases likely contributed to gold's 65% price surge last year, describing Tether as a "significant new buyer" that "could drive sustained gold demand."

Nonetheless, Tether represents just a fraction of the vast investor influx into gold, with central banks and ETF investors collectively purchasing over 1,500 tons last year.

John Reade, Chief Strategist at the World Gold Council, acknowledged that Tether's purchases do impact the price, but stated they are only a minor component of the metal's astonishing rally. "They are part of the rise, but not all of it," he said.

Ardoino is not content with merely buying gold. He also wants Tether to trade gold—effectively competing with market dominants like JPMorgan Chase & Co. and HSBC.

Ardoino stated that to enable sustained long-term gold purchases and capitalize on potential market inefficiencies, the company needs "the world's best gold trading floor." He added that market analysis is ongoing, and potential trading strategies would aim to ensure the company "maintains a long-term hold on physical gold."

"Our goal is to have stable, reliable, long-term access to gold," Ardoino said.

The company's growing ambition is evidenced by its hiring of two senior gold traders from HSBC to help manage its activities in the physical gold market. Ardoino mentioned that Tether is exploring ways to actively trade its gold holdings, including capturing potential arbitrage opportunities when futures costs diverge significantly from physical metal prices.

Purchasing around $1 billion worth of physical gold monthly presents a logistical challenge. Ardoino said Tether buys directly from Swiss refineries as well as from the market's largest financial institutions, noting that large metal orders can take months to be delivered.

He stated the company is exploring how to enhance the efficiency of its gold purchasing process "because one to two tons a week is a very significant number." Tether's interest extends beyond bullion. Given its bullish stance on the precious metal, the company has also acquired shares in royalty companies, which specialize in purchasing revenue streams from gold mining firms.

Tether has taken stakes in almost all mid-sized royalty companies listed in Canada, including Elemental Royalty Corp., Metalla Royalty & Streaming Ltd., Versamet Royalties Corp., and Gold Royalty Corp.

According to people familiar with the matter, this rapid accumulation of royalty company shares was spearheaded by Juan Sartori, a former Uruguayan senator, businessman, and co-owner of English Premier League football club Sunderland.

In some respects, Tether's approach to gold closely resembles that of a central bank. Like central banks, it values gold's liquidity and its status as a "non-debt asset" for reserves.

In an earlier interview, Ardoino stated that gold is "logically a safer asset than any national currency. Every central bank in the BRICS nations is buying gold."

This week, he noted that the emerging market users of Tether's dollar stablecoin "are precisely the people who love gold, who have long used it to protect themselves from governments that chronically devalue their local currencies. We believe the world is heading into a dark place, we believe there is a lot of turbulence."

Nevertheless, buying gold also represents a risk. Any move away from holding dollars carries potential loss risks, threatening its ability to ensure USDT always maintains a value of $1.

Last November, analysts at S&P Global Ratings downgraded their stability assessment for USDT to "weak." The analysts stated this assessment "reflects the increased proportion of high-risk assets in USDT's reserves over the past year," including Bitcoin, gold, collateralized loans, and corporate bonds, coupled with limited disclosure.

Tether reports the gold held as reserves for its dollar stablecoin in quarterly attestations audited by BDO Italia SpA.

So far, however, Tether's massive gold bet has been strikingly successful. Its buying spree coincided with the market's largest rally since the 1970s, as both investors and governments grew anxious about holding US dollars.

Tether is attempting to leverage this trend to promote another product—Tether Gold (ticker XAUT), a gold token redeemable for physical bullion. The company has issued XAUT equivalent to approximately 16 tons of gold (valued at $2.6 billion) and has launched a smaller-denomination token called Scudo.

Ardoino said there is a "strong chance" XAUT could reach a market circulation of $5 to $10 billion by year-end. In such a scenario, just for the XAUT product alone, the company might need to purchase over a ton of gold per week, excluding purchases for Tether's reserves.

While XAUT and other gold tokens remain minuscule compared to the $500+ billion ETF market, Ardoino predicts their time is coming.

"In my foresight, since foreign governments are buying gold in large quantities, we believe these countries will soon launch tokenized versions of gold as a currency to compete with the dollar," Ardoino said.

Whether such a gold-backed dollar competitor truly emerges or not, Tether's purchasing activity has captured the zeitgeist. The World Gold Council's Reade commented, "It's very interesting that one of the major players in the crypto space sees gold as the 'original trade' against dollar debasement."