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

MeNews
ME News message: On May 20 (UTC+8), Christoph Hock, head of digital assets and tokenization at Union Investment, a major German asset management company, said at the London Digital Money Summit 2026 that USDT and USDC are not “stablecoins” in the true sense, and that their reserve structure is closer to a high-risk hedge fund. Hock noted that Tether’s reserves include large holdings of gold and Bitcoin assets, meaning they are not purely low-risk cash equivalents linked directly to the U.S. dollar. He believes this structure would transmit market volatility risk to corporate finances and institutional investors. He specifically mentioned that USDC previously saw a 13% de-pegging incident, saying 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 significant mark-to-market losses on cash positions within a short period, and criticized that some current stablecoins have already deviated from the original purpose of being “fiat-pegged digital cash.” Data shows that as of January 2026, Tether’s gold reserve size was approximately 148 tons, with a value of about $23 billion, which has exceeded the gold reserve sizes of some sovereign countries. As European regulators continue to strengthen their scrutiny of unauthorized stablecoins, transparency of stablecoin reserves and liquidity risks are becoming core topics of concern for traditional financial institutions. (Source: BlockBeats)
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