Tether CEO Paolo Ardoino refuted S&P Global’s downgrade of the USDT stablecoin’s peg rating to “weak,” emphasizing that the agency overlooked $7 billion in excess equity, $23 billion in retained earnings, and $500 million in monthly profits from US Treasury yields, ensuring robust collateralization beyond reported reserves.
Tether’s Q3 2025 assets reached $215 billion against $184.5 billion in stablecoin liabilities, per the company’s attestation report.
Ardoino highlighted unconsidered group equity and consistent revenue streams ignored in the rating assessment.
Market analysts like Arthur Hayes raised concerns over Tether’s exposure to gold and Bitcoin amid falling Treasury yields, estimating a 30% drop could impact solvency.
Tether USDT downgrade sparks debate as CEO counters S&P’s weak peg rating, revealing overlooked assets and profits. Discover how this affects stablecoin stability and crypto markets today.
What is behind the Tether USDT downgrade by S&P Global?
The Tether USDT downgrade by S&P Global to a “weak” rating on its ability to maintain the dollar peg stems from concerns over the company’s reserves, particularly its holdings in Bitcoin and gold. This assessment, issued on a recent Wednesday, marks the lowest score on S&P’s scale and has stirred uncertainty in the cryptocurrency sector where USDT plays a pivotal role. Tether’s leadership, however, maintains that the evaluation failed to fully account for the firm’s comprehensive financial position.
Source: Paolo Ardoino
How does Tether’s balance sheet counter the downgrade concerns?
Tether CEO Paolo Ardoino directly addressed the Tether USDT downgrade by pointing to the company’s Q3 2025 attestation report, which shows total assets of approximately $215 billion compared to $184.5 billion in stablecoin liabilities. This leaves about $7 billion in excess equity on top of the reserves, plus an additional $23 billion in retained earnings within the Tether Group’s equity structure. Ardoino stressed that S&P overlooked these elements, including the group’s equity contributions and the steady $500 million in monthly base profits derived solely from US Treasury yields.
These figures underscore Tether’s financial resilience, with revenues far exceeding operational needs despite a lean team of around 150 employees. The company’s diversified income streams, bolstered by interest from secure assets, provide a buffer against market volatility. Analysts note that such transparency in attestations helps build trust, even as external ratings agencies apply conservative methodologies that may not capture the full scope of operational efficiencies.
Related: Tether to accelerate push into commodity lending with cash, USDt credit.
Frequently Asked Questions
What factors led to S&P’s weak rating for Tether’s USDT peg stability?
S&P Global cited Tether’s reliance on Bitcoin and gold reserves as primary concerns in the USDT downgrade, rating its peg maintenance ability as “weak.” The agency focused on potential risks from these volatile assets amid shifting interest rates, without fully incorporating Tether’s broader equity and revenue details from the Q3 2025 report.
Is Tether’s USDT at risk of losing its dollar peg according to experts?
Experts like former Citi analyst Joseph Ayoub argue that Tether’s USDT remains strongly collateralized, with excess assets and billions in interest income providing stability far beyond traditional banking standards. While some, like Arthur Hayes, warn of downside risks from gold and Bitcoin corrections, Tether’s leadership emphasizes overlooked profits and equity that safeguard the peg’s integrity.
Source: Arthur Hayes
Key Takeaways
- Tether’s robust reserves: With $215 billion in assets exceeding $184.5 billion liabilities, the company holds significant excess equity to support USDT’s peg.
- Overlooked revenues: Monthly profits of $500 million from US Treasuries, plus $23 billion in retained earnings, were not factored into S&P’s assessment.
- Analyst perspectives: While risks from gold and Bitcoin holdings persist, experts highlight Tether’s efficient operations and strong collateralization as key strengths.
Conclusion
The Tether USDT downgrade by S&P Global has ignited discussions on stablecoin fundamentals and Tether’s balance sheet resilience, revealing a gap between rating methodologies and actual financials. As Tether continues to affirm its position through detailed attestations and expert endorsements, the crypto community watches closely for impacts on market infrastructure. Investors should monitor upcoming reports and regulatory developments to gauge long-term stablecoin stability—stay informed on evolving crypto finance trends.