Private stablecoin structures face increased institutional scrutiny as regulators in European bloc countries crack down on unlicensed digital assets, digital asset experts suggested on Tuesday at the Digital Money Summit 2026 in London.
Christoph Hoch, head of tokenization and digital assets at Union Investment, Germany’s largest institutional investor with around $620 billion in assets under management, emphasized that the reserve backing that Tether and Circle commonly use for dollar-backed stablecoins is structurally more similar to speculative funds than a true fiat peg.
“Honestly, from my perspective, stablecoins are not stablecoins,” Hock said. “We talked about tethers, we talked about circles. $USDCAnd if you look at Tether’s investment assets, for example, they have a lot of gold, and they also have a lot of Bitcoin. ”
Mr. Hock’s role will be to build the asset manager’s token economy strategy, digital cash mechanism, and fund tokenization framework. That’s why I said it. $USDT and $USDC Similar to hedge funds, they warned that the tokenomics of these stablecoins are vulnerable and could impact the financial interests of their holders.
“And perhaps, as seen in the following example, $USDCWe’ll need taxpayer money again to bail it out,” he said, recalling Circle’s 13% delinking event and the “catastrophic risks it poses to institutional investors.”
In March 2024, $USDC It fell as low as $0.74 on three separate occasions following the market-wide decline. At the time, depegging was said to occur when traders sell $USDC for $USDTthere is not enough liquidity to maintain the $1 peg. A year ago $USDC’s typically stable price fell 13% to 87 cents, while Ethereum gas prices soared hours after a crypto-linked bank collapsed.
Hock also criticized Tether’s decision to allocate large amounts of funds to gold and Bitcoin. He argued that these asset choices expose corporate treasuries to market volatility and shift risk from stablecoins to that of stealth hedge funds.
As of January 2026, Tether’s gold reserves are estimated at 148 tons, worth approximately $23 billion, ranking it among the top 30 gold-holding countries in the world, surpassing several sovereign nations.
Hock argued that a sudden 13% loss in mark-to-market on cash positions would be devastating for corporate treasury departments and asset managers that rely on stablecoins as a secure means for next-day cash settlements only. He added that institutional investors simply cannot afford to take on this level of risk, and accused stablecoins of undermining their fundamental promise as digital assets pegged to fiat currencies.
