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Opinion: Tether and USDC reserve structures are more similar to high-risk hedge funds

MeNews
ME News, May 20 (UTC+8): At the London Digital Money Summit 2026, Christoph Hock, head of digital assets and tokenization at German asset management firm Union Investment, said that USDT and USDC are not “stablecoins” in the true sense, and that their reserve structures are more akin to high-risk hedge funds. Hock noted that Tether’s reserves hold large amounts of gold and Bitcoin assets, meaning they are not purely low-risk cash equivalents tied to the U.S. dollar. He believes this kind of structure would pass market volatility risk through to corporate treasuries and institutional investors. He specifically mentioned that USDC previously suffered a 13% de-pegging incident and said that for corporate finance departments and asset management institutions that rely on stablecoins for overnight cash settlement, such price fluctuations pose “catastrophic risks.” Hock said institutional investors cannot withstand large mark-to-market losses in cash positions over a short period, and criticized that some current stablecoins have already deviated from the original goal of being “fiat-backed digital cash.” Data shows that as of January 2026, Tether’s gold reserves are about 148 tons, worth approximately $23 billion, already exceeding the gold reserves of some sovereign countries. As European regulators continue to step up scrutiny of unlicensed stablecoins, stablecoin reserve transparency and liquidity risk have become core issues drawing attention from traditional financial institutions. (Source: BlockBeats)
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