Christoph Hock, head of tokenization and digital assets at Union Investment, reportedly questioned whether institutions could treat Tether’s USDT and Circle’s USDC as cash equivalents during the Digital Money Summit 2026 in London. The event took place on May 19–20.
His reported assessment was that some private stablecoin structures look less like cash equivalents and more like investment funds. The concerns centered on Tether’s gold and bitcoin holdings and potential losses for corporate treasuries and asset managers using tokens for overnight settlement.
Reserve composition and redemption
In an announcement dated May 1, 2026, Tether reported approximately $141 billion in direct and indirect exposure to U.S. Treasury bills as of March 31. It also reported about $20 billion in physical gold, $7 billion in bitcoin and assets exceeding liabilities by $8.23 billion.
Tether said proprietary investments held through Tether Investments were separate from the reserves backing USDT and were funded from excess capital and profits.
An earlier estimate attributed to Jefferies analysts put Tether’s gold reserves at approximately 148 tonnes, valued at roughly $23 billion, as of January 31, 2026. That reported estimate covered gold backing both USDT and Tether’s separate gold-backed token, XAUT. Its scope and valuation date therefore differed from Tether’s March-end USDT reserve disclosure.
Circle described USDC’s reserves as short-duration U.S. Treasuries and cash deposits in a March 28, 2023 disclosure. The company said USDC was designed to be redeemable for one U.S. dollar per token. That historical description concerns a different reserve structure from Tether’s disclosed gold and bitcoin exposure.
USDC’s historical price disruptions
In March 2023, Circle disclosed that $3.3 billion, about 8% of USDC’s reserves, was held at Silicon Valley Bank when the bank failed. USDC subsequently lost its dollar peg on secondary markets.
A December 17, 2025 study by Federal Reserve researchers Chuan Du, Ria Sonawane and Cy Watsky documented a low of about $0.86 in their data. They found that constrained weekend redemptions contributed to selling pressure. The price recovered sharply after U.S. authorities announced protection for all SVB depositors and fully recovered when Circle resumed processing redemptions on March 13.
The researchers concluded that stablecoins with high-quality backing assets could remain vulnerable during significant stress. Their analysis identified access to redemptions as an important factor in USDC’s secondary-market price during the episode.
In a separate episode on January 3, 2024, USDC reportedly traded briefly at 0.74 USDT on Binance’s USDC/USDT pair before immediately returning to parity. That reported price concerned the specific trading pair.
