Recently, I made a decision—to convert all $90,000 worth of USDT in my account into USDC.

It wasn’t on a whim, but because I noticed some unsettling signals.

At the end of last month, S&P downgraded USDT’s stability rating directly to level 5, the lowest in their system, labeled as "weak." After this rating came out, I started digging into their reserve structure report. Turns out, the proportion of high-risk assets jumped from 17% to 24%, and their Bitcoin holdings alone account for 5.6% of total circulation. The problem is, their excess collateral buffer is only 3.9%, which means if BTC drops even a bit, the collateralization rate could become unsustainable.

What’s even more baffling is that Tether doesn’t disclose who their custodians are, says nothing about the credit quality of their counterparties, their reserve asset details are vague, and as for audit reports? There aren’t any.

Another detail: Tether uses users’ funds to invest in gold and other ventures—if they make money, the profits are theirs, but if they lose, the risk is entirely on the token holders. Plus, in El Salvador, the regulations are absurdly lax, and there’s no transparency on asset segregation at all.

I thought, the practical usage difference between USDC and USDT is minimal, so why take the risk of holding an asset with an ever-increasing risk exposure? Retail investors are already at the bottom of the food chain—if something actually happens, there’s no way to get out in time. USDT has faced countless doubts over the years. People become numb after hearing “wolf” cried so many times, but what if the wolf really does show up one day?

Principal is the foundation of everything—protecting it is more important than anything else.