At the Digital Money Summit 2026 in London, experts highlighted growing institutional scrutiny over private stablecoins, with regulators in Europe clamping down on unauthorized digital assets. Christoph Hock, head of Tokenization and Digital Assets at Union Investment—one of Germany's largest asset managers managing nearly $620 billion—argued that stablecoins like Tether (USDT) and Circle’s USDC structurally resemble speculative funds rather than fiat-pegged assets.
“To be honest, a stablecoin, from my perspective, is not a stablecoin,” Hock said. He pointed to Tether’s massive holdings in gold and bitcoin, stating, “They have massive holdings in gold, they have massive holdings in bitcoin.” Hock warned that this composition makes these stablecoins behave more like hedge funds, exposing corporate treasuries to severe market volatility. He recalled Circle’s USDC de-pegging events, including a 13% drop to 87 cents in 2023 and multiple dips to $0.74 in March 2024, emphasizing the “catastrophic risk” to institutional investors reliant on overnight cash settlement.
Hock also noted that in a liquidity crisis, taxpayers’ money might again be needed for bailouts, referencing the earlier turmoil. He criticized Tether’s allocation of $23 billion in gold reserves—148 tonnes, ranking among the top 30 global holders—as shifting risk from a stablecoin to a stealth hedge fund. His message was clear: for asset managers, a sudden 13% mark-to-market loss on cash positions is unacceptable, and these stablecoins risk undermining their foundational promise.
