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The largest purchaser of gold, often regarded as the world’s ultimate safe haven asset, in the past year was not a nation such as China, Japan, or any Gulf country. Instead, it was a company that many might not expect—a cryptocurrency firm named Tether. Based in El Salvador, Tether operates USDT, the largest stablecoin globally, a digital currency backed by traditional hard currency assets. This stablecoin acts as a bridge between highly volatile cryptocurrencies and the conventional financial system, functioning much like an offshore dollar.
According to data from the European Central Bank, Tether acquired more gold last year than any other buyer. The firm stores its gold in a secure Swiss former nuclear bunker, evoking imagery more akin to a James Bond film, as described by Tether’s CEO. Beyond gold, Tether also holds significant amounts of U.S. government debt—about $135 billion (£101 billion)—which exceeds the holdings of several G20 countries, including South Korea. Despite this enormous financial footprint, Tether operates with a relatively small team of just 200 employees, behaving in some respects like a private central bank.
Tether’s influence extends beyond finance and into UK politics. A notable shareholder, Christopher Harborne, has made record-breaking donations totaling £15 million to Nigel Farage’s Reform Party, which were fully declared. Harborne contributed £9 million in August, followed by additional donations of £3 million each in October and January. Prior to these donations, Harborne had given £5 million directly to Farage, a contribution that was not initially disclosed and later became the subject of parliamentary scrutiny. Both Farage and Harborne have consistently asserted that these financial gifts were given without conditions or expectations of political favor.
Nigel Farage has publicly expressed support for cryptocurrencies and the importance of regulatory frameworks. In a meeting with Bank of England governor Andrew Bailey last September, Farage raised concerns about the potential restraints on stablecoin ownership, which the Bank was considering setting between £10,000 and £20,000. Although Farage did not specifically mention Tether during this conversation, the general topic of stablecoin regulation was central to his remarks. Bailey acknowledged the meeting but stated that the discussion did not change the Bank’s policies, emphasizing his ability to recognize and discount lobbying efforts. Farage has repeatedly advocated for the UK, particularly London, to become a global center for cryptocurrency under proper regulation, highlighting the growing significance of this sector.
The Reform Party’s public stance on cryptocurrency regulation has evolved alongside these developments. Initially, their draft Cryptoassets and Digital Finance Bill included only brief references to stablecoins and omitted the Bank of England’s proposed holding limits. This legislative draft was later removed from public access, although Reform maintains that their policy stance remains unchanged. Stablecoin regulation has become a key focus of Reform’s dialogue with the Bank of England since the official consultation process began last November. Andrew Bailey not only heads the Bank of England but also chairs the Financial Stability Board, making him an influential figure in global discussions on cryptocurrency regulation at the G7 and G20 levels. He has expressed concerns that stablecoins, if perceived as money without guaranteed value preservation, could threaten financial stability.
Tether’s situation also ties into the broader regulatory landscape in the United States. The Trump administration passed the so-called Genius Act last July, which legitimized stablecoins under certain regulatory conditions. This legislation led to significant market reactions, including a tenfold increase in value for Circle, a stablecoin provider that went public in New York. Around the same time, Tether and its advisers prepared to capitalize on a valuation of $500 billion. Meanwhile, the timing of Harborne’s donations to the Reform Party coincided with this surge in valuation, which increased the value of his stake in Tether considerably. Harborne holds approximately 13% of Tether’s shares but maintains no executive role or controlling position within the company. Additionally, he was a registered lobbyist for the Digital Currencies Governance Group—an organization founded by Tether—at the European Parliament for seven months starting in September 2020. The group has consistently defended Tether in regulatory discussions.
Responding to the BBC’s inquiries, a spokesperson for Reform denied any suggestion that party policies were influenced by individual donors. They emphasized that discussions with regulators, including the Bank of England, do not require disclosure of donors’ financial interests. Recently, the Bank eased some proposed stablecoin restrictions following recommendations from the House of Lords financial committee. While Farage has insisted that donations were made without conditions, the level of financial contribution from a single individual to a major political party is unprecedented, especially in a sector as sensitive to regulatory changes as cryptocurrency. If an early election leads to a Reform victory, the party would have significant influence over the appointment of the next Bank of England governor before Andrew Bailey’s term concludes in 2028.
Sir Charlie Bean, a former deputy governor of the Bank of England, highlighted the delicate balance inherent in stablecoin oversight. He noted that stablecoins can only remain stable if governed by appropriate regulation but warned of a “regulatory race to the bottom” in pursuit of profits. Regarding the financial ties between donors and the governance of institutions like the Bank of England, he called for greater transparency to address potential conflicts of interest. The questions raised by the meetings and donations last September remain unresolved and continue to prompt scrutiny in this evolving intersection of finance and politics
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