Tether CEO Paolo Ardoino has strongly rejected S&P Global Ratings’ recent downgrade of USDt’s peg stability to the lowest possible score, calling the assessment “incomplete and misleading.”
What S&P Got Wrong, According to Tether
S&P cited Tether’s exposure to Bitcoin (5.6% of reserves) and other “higher-risk” assets like gold and secured loans as the primary reason for the “weak” rating, warning that a sharp BTC price drop could threaten the 1:1 peg.
(Sources: X)
Ardoino countered that the agency:
- Failed to include $30+ billion in excess reserves and profits not yet reflected in the balance sheet
- Ignored Tether’s $7.7 billion in Q3 2025 net profit (the most profitable quarter in company history)
- Did not account for the company’s $215 billion in total consolidated assets against $184.5 billion in stablecoin liabilities — a 116%+ over-collateralization ratio
“S&P looked at a snapshot and missed the full picture. We are more over-collateralized and profitable than ever,” Ardoino wrote on X.
Market Reaction and Broader Context
Despite the downgrade, USDt has traded within ±0.01% of $1.00 across major venues, with no visible de-pegging pressure. 24-hour volume remains above $50 billion, and redemption queues are normal, and the token’s market cap sits at $184.5 billion — still the largest stablecoin by a wide margin.
Analysts note that S&P’s methodology appears to penalize diversification into yield-generating assets (U.S. Treasuries, BTC, gold, loans) while giving higher marks only to cash-like holdings — a stance that disadvantages profitable stablecoin issuers.
Bottom Line
While S&P’s report made headlines, the market has largely shrugged it off. USDt continues to function normally, redemptions, trading, and settlements, backed by the strongest reserve report in Tether’s history.
For now, the downgrade appears to be more noise than signal — another chapter in the ongoing tension between traditional rating agencies and the cryptocurrency industry they still struggle to understand.
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