Union Investment’s digital-assets lead warns USDT and USDC

Union Investment’s Christoph Hock warned that USDT and USDC can suffer sudden liquidity-driven depegs that create unacceptable mark-to-market losses for institutions using stablecoins as overnight settlement cash. The comments land as European regulators tighten scrutiny of private stablecoins and clamp down on unauthorized digital assets.

Key Takeaways

A senior executive at Union Investment said USDT and USDC should not be treated as fiat-pegged cash equivalents, arguing their reserve structures resemble speculative funds.
USDC has already shown it can gap under stress, including a 13% drop to $0.87 in 2023 and three separate prints as low as $0.74 in March 2024.
Tether’s reserve allocations to gold and bitcoin were criticized as importing market volatility into instruments used for corporate treasury settlement.
Tether’s gold holdings were estimated at 148 tonnes worth roughly $23 billion as of January 2026, placing it among the top 30 global gold owners.

Union Investment’s Stablecoin Warning Lands as Europe Tightens the Screws

At Digital Money Summit 2026 in London, Christoph Hock, head of Tokenization and Digital Assets at Union Investment, challenged the idea that the two dominant dollar stablecoins function as stable cash. Union Investment was described as one of Germany’s largest institutional asset managers with nearly $620 billion in assets under management.

Hock’s framing was blunt and aimed at how institutions actually use these tokens: as overnight settlement cash where the tolerance for price movement is close to zero. “To be honest, a stablecoin, from my perspective, is not a stablecoin,” Hock said. He added that USDT and USDC look structurally more like hedge funds than true fiat pegs.

The timing matters. The discussion was explicitly set against a backdrop of European regulators intensifying scrutiny of private stablecoins and clamping down on unauthorized digital assets. For traders, that combination can turn “stablecoin confidence” into a tradable narrative during risk-off windows, even when nothing breaks on-chain. When large institutions publicly question the cash-equivalent premise, liquidity can become reflexive.

USDC’s Depeg Track Record: $0.87 in 2023 and $0.74 Prints in March 2024

Hock anchored his warning in historical price action that is large enough to matter for collateral and settlement workflows. He referenced Circle’s USDC depegging by 13% to $0.87 in 2023, an episode that coincided with surging Ethereum gas fees hours after a crypto-tied bank failed.

He also pointed to March 2024, when USDC traded as low as $0.74 on three separate occasions following a marketwide sell-off. The mechanism described was straightforward market structure: traders sold USDC for USDT, and secondary-market liquidity was insufficient to hold the $1 line.

Those prints underline the core institutional risk: even short-lived dislocations can translate into immediate mark-to-market losses on positions treated operationally as cash. Hock called it a “catastrophic risk it poses to institutional investors.”

Reserve Composition as a Risk Vector: Tether’s Gold-and-Bitcoin Exposure

Hock’s “stealth hedge fund” critique centered on what sits behind the peg, not the marketing label. “We discussed Tether, we discussed Circle’s USDC, and when looking at the invested assets, for example, of Tether, they have massive holdings in gold, they have massive holdings in bitcoin,” he said.

The article did not quantify Tether’s bitcoin holdings or provide a detailed reserve breakdown for USDC, leaving part of the comparison at the level of Hock’s assessment rather than a side-by-side reserve audit. Still, the gold number gives markets something concrete to anchor on.

As of January 2026, Tether’s gold reserves were estimated at 148 tonnes valued at roughly $23 billion, ranking among the top 30 global owners of gold and surpassing several sovereign nations. In a stress regime, that kind of non-cash exposure is exactly what institutions worry can turn a settlement instrument into a volatility transmission channel.

Hock also suggested public backstops could be pulled into future crises, saying, “And then probably, as seen with USDC, taxpayers' money is again needed to bail them out,” without describing a specific mechanism.

Traders’ Checklist for the Next Liquidity Shock

The next real signal is not a conference quote. It is how USDC and USDT trade when the tape turns risk-off.

First, any new EU or European national regulatory actions targeting private stablecoins or “unauthorized digital assets” can shift perceived redemption and banking access risk, even before rules bite.

Second, watch secondary-market pricing and spreads during the next broad drawdown. Sub-$0.99 prints and widening venue-to-venue spreads are early stress tells that liquidity is thinning.

Third, reserve disclosure updates matter most when they clarify what portion of reserves is cash-like versus volatile assets. For Tether, that means clearer sizing of bitcoin holdings and the share held in gold versus cash equivalents.

Finally, monitor stablecoin-to-stablecoin flow shifts during volatility, especially USDC selling into USDT. That rotation was cited as a driver of March 2024’s $0.74 prints and is the kind of microstructure move that can front-run bigger basis and collateral effects.

When ‘Cash’ Can Gap, Collateral and Basis Become the Trade

I treat Hock’s comments less as a prediction and more as a reminder about plumbing risk. The threshold that matters is whether stablecoins keep behaving like tight $1 instruments when everyone wants out at once, because the historical prints he cited show the gap can be double digits.

If sub-$0.99 pricing starts showing up alongside widening spreads and one-way flows from USDC into USDT, the setup starts to look structural rather than narrative-driven, and the practical impact is straightforward: collateral haircuts rise, basis gets jumpy, and “cash” stops being a neutral settlement layer.

Sources

CoinDesk