By Polina Devitt

LONDON, May 1 (Reuters) - Tether, issuer of the world’s largest stablecoin, slowed its purchases of gold for its reserves to back Tether USDT in the first quarter to about 6 metric tons from 27 tons in October-December, its quarterly report showed on Friday.

The crypto company became a significant buyer of gold last year for its reserves to back the Tether USDT stablecoin, a digital dollar with $189.5 billion worth of tokens in circulation, and the Tether XAUT gold token with $3.3 billion in circulation.

Each Tether-issued dollar token is intended to represent one U.S. dollar held in reserve. When a user provides Tether with a dollar, the company issues one USDT and holds assets of equivalent value, such as U.S. Treasury bills. Those reserves are meant to ensure that USDT can be redeemed for dollars if need be. Tether XAUT stablecoin is fully backed by gold.

Reserves to back Tether USDT had stocks of gold worth $19.8 billion as of the end of March, the report showed. That would be equal to about 132 metric tons of gold at the market price at that time, versus 126 tons as of the end of last December, according to Reuters calculations.

The reserves backing Tether USDT are predominantly U.S. Treasury Bills, worth $117 billion, with gold representing only 10% as of the end of March. Bitcoin made up $7 billion of the reserves.

For the Tether gold token, XAUT, separate data showed Tether currently holds 22 tons of gold to back it up, up 6 tons from the end of December.