TLDR
- A senior executive at Union Investment called Tether and USDC “not true stablecoins” due to their holdings in gold and bitcoin.
- USDC has previously lost its $1 peg, dropping to $0.87 cents during a banking crisis in 2023.
- Tether and Circle together control nearly 90% of the global stablecoin market.
- The Bank for International Settlements warns that even T-bill-heavy reserves may not be enough to survive a mass redemption event.
- Regulators in the US and Europe are moving toward imposing bank-style rules on stablecoin issuers.
Tether and Circle’s USD Coin are the two biggest names in the stablecoin market. Together, they make up close to 90% of all stablecoin dollars in circulation. But a growing number of financial experts and regulators are asking whether these coins are as safe as they appear.
At the Digital Money Summit 2026 in London, Christoph Hock, head of Tokenization and Digital Assets at Union Investment — one of Germany’s largest asset managers with nearly $620 billion under management — made a direct claim: Tether and USDC are not true stablecoins.
His reasoning came down to what backs them. Tether holds large amounts of gold and bitcoin alongside its Treasury bills. As of January 2026, Tether held an estimated 148 tonnes of gold, worth roughly $23 billion, putting it among the top 30 gold holders in the world.
Hock argued that this makes Tether look more like a speculative hedge fund than a safe cash equivalent. “When looking at the invested assets of Tether, they have massive holdings in gold, they have massive holdings in bitcoin,” he said.
The De-Pegging Risk Is Real
USDC has already shown what can go wrong. In early 2023, after the collapse of a crypto-linked bank, USDC’s price dropped to $0.87. In March 2024, it dropped to $0.74 on three separate occasions following a market selloff.
Hock said this kind of drop is catastrophic for institutional investors who use stablecoins for simple overnight cash settlement. A 13% mark-to-market loss on what was supposed to be a cash position is not something corporate treasuries can absorb.
He also raised the prospect of taxpayer bailouts, referencing past events and warning that USDC’s structure could put public money at risk if a crisis hit hard enough.
Even T-Bills May Not Be Enough
A separate warning came from the Bank for International Settlements. The BIS pointed out that Tether became the seventh-largest buyer of US Treasuries in 2024, with $33.1 billion in net purchases over the year.
But it also warned that holding safe assets doesn’t solve the core problem: redemption speed. If a large number of holders tried to cash out at once, even a portfolio made up of Treasury bills might not liquidate fast enough to meet demand.
Traditional money market funds have protections for exactly this scenario — including liquidity fees and redemption gates. Stablecoin issuers currently operate without most of those rules in most countries.
Regulators Are Moving In
Both the European Central Bank and the Federal Reserve have flagged systemic concerns. The Fed has also noted that if consumers park savings in stablecoins instead of bank accounts, banks lose a key funding source, creating new risks for the broader financial system.
With two companies controlling nearly all the stablecoin market, regulators in the US and Europe are now pushing for bank-style oversight of stablecoin issuers, including reserve standards, audits, and possible redemption controls.
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