Union Investment: USDT, USDC are effectively hedge funds

German asset management giant Union Investment has strongly criticized what it sees as structural flaws in private stablecoins like Tether (USDT) and Circle (USDC). The firm argued that their reserve assets, which include Bitcoin and gold, effectively turn the stablecoins into highly speculative stealth hedge funds. Union Investment added that this asset composition poses a significant risk, potentially inflicting losses comparable to a margin call on corporate finance teams or institutional investors during periods of market volatility.