Union Investment exec: USDT, USDC reserves structured like hedge funds

The reserve structures of Tether's USDT and Circle's USDC are effectively similar to speculative hedge funds, argued Christoph Hock, Head of Digital Assets and Tokenization at major German asset management firm Union Investment. Speaking at the London Digital Money Summit 2026, Hock noted that Tether in particular is increasing its exposure to gold and Bitcoin. He explained that while companies adopt stablecoins as a simple cash-like payment method, their actual structure resembles an investment portfolio exposed to market volatility. "If a loss occurs, as it did when USDC depegged by around 13% in the past, it would be a disaster for institutions," Hock said. He added that the core credibility of stablecoins lies in their "cash equivalency," but their reserves are actually managed to pursue profits by including risky assets. "This makes it difficult for those considering adopting stablecoins to view them as safe assets," he concluded.