Tether Downgraded to Weak Rating by S&P Global Over Asset Concerns

Tether's USDT stablecoin has been downgraded by S&P Global due to "persistent gaps in disclosure" and an increased allocation of "high-risk assets" in its reserves. These assets include Bitcoin, gold, corporate bonds, and secured loans, which pose risks related to credit, market, interest rate, and foreign exchange.

S&P Global introduced a new assessment scale in 2023 for stablecoins, rating Tether's USDT as “5 (weak),” down from the previous “4 (constrained).”
The downgrade reflects concerns over Tether's transparency about its custodians' and counterparties' creditworthiness.

Tether CEO's Response

CEO Paolo Ardoino criticized traditional credit rating methods, suggesting they are outdated for digital asset issuers like Tether.
Ardoino claimed Tether is "overcapitalized" and lacks "toxic reserves," contrasting with conventional financial entities.
He argues that the downgrade reflects discomfort within traditional finance toward Tether's approach.

Tether's Resilience and Gold Holdings

Tether asserted its stability through financial crises and maintains sufficient reserves for redemptions, including US Treasuries.
The company has issued $184 billion worth of USDT.
Tether has become the largest independent holder of gold, purchasing 26 tons in the last quarter, totaling nearly 120 tons.

Tether