Tether’s stability and reliability in maintaining the dollar peg of USDT was downgraded by S&P Global Ratings. The agency warned that a drop in BTC value could damage the USDT collateral. Tether’s USDT was awarded a stability rating of ‘weak’ by the S&P Global Ratings agency, down from a previous grade of ‘constrained’. The agency announced its new assessment reflects the exposure of USDT to high-risk assets, including BTC, gold, secured loans, and corporate bonds. According to the agency, Tether has also not fully disclosed its reserves. Tether has only posted attestations , avoiding a full audit since its inception. However, the stablecoin issuer claims it is solvent, with sufficient backing for USDT in the form of low-risk T-bills and corporate bonds. Tether’s founder Paolo Ardoino responded to the downgrade, posting ‘We wear your loathing with pride.’ Ardoino considered the metric meaningless for Tether, and called out the agency for granting prime ratings to assets that caused a financial crisis. Ardoino said Tether is overcapitalized and holds no toxic reserves. to S&P regarding your Tether rating: We wear your loathing with pride. The classical rating models built for legacy financial institutions, historically led private and institutional investors to invest their wealth into companies that despite being attributed investment grade… — Paolo Ardoino 🤖 (@paoloardoino) November 26, 2025 Tether accumulated BTC, but did not use it to back USDT Over the years, Tether has also accumulated over 87K BTC , as according to the Tether transparency, the coins are a part of the USDT stability reserve , and reflect Tether’s ongoing accumulation. Tether’s reserves increased their share of BTC, exposing the stablecoin to a more volatile collateral. | Source: Tether According to S&P Ratings analysts, BTC makes up a small part of the supply of USDT, which is now at $184B. Around 5.4% of Tether’s reserves are in BTC, up from 3.6% for the previous reporting period. This component of Tether’s reserves worried S&P Ratings. ‘ A drop in the bitcoin’s value combined with a decline in value of other high-risk assets could therefore reduce coverage by reserves and lead to USDT being undercollateralized, ’ said Rebecca Mun and Mohamed Damak in the report for S&P Ratings. Tether claims it now ranks 17th in the world among the biggest holders of US T-Bills, reflecting its dedication to solid collateral for issuing USDT. However, Tether also carries a mix of other assets, some of which may carry a higher risk. According to the latest transparency report, the stablecoin issuer includes 8% in secured loans, with none made to affiliated parties. USDT remains safe without recent de-pegging Currently, BTC is not the primary asset backing USDT, and any fluctuations have not caused USDT to de-peg. Unlike synthetic or asset-backed stablecoins, the value of USDT or its minting does not hinge on other crypto assets. Despite the weakening value of BTC, only the riskiest synthetic stablecoins de-pegged in the past month. Still, S&P was wary of Tether’s limited information on its custodians, counterparties, and bank account providers. Tether, Inc. still has limited transparency on its reserve management and asset segregation. USDT also lacks an official channel for direct redemption, unlike Circle’s USDC. As Cryptopolitan reported , Tether also accelerated its gold acquisitions, surpassing some of the major central banks. Tether also expanded the supply of its XAUT gold-backed token, as RWA trading became a major narrative in the crypto space. Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program
