S&P International Scores has downgraded Tether's flagship stablecoin USDT to the bottom potential rating on its stablecoin stability scale, citing elevated publicity to dangerous property like Bitcoin. BTC$88,308.01 and continued gaps in provision disclosure.
Based on the revised evaluation launched on Wednesday, the ranking company lowered USDT's rating on its means to take care of a value peg with the US greenback to five (weak) from the earlier task of 4 (suppressive) in December 2023.
Tether disputed S&P’s evaluation in a press release shared with CoinDesk.
“Tether strongly disagrees with the characterization offered within the report, which fails to seize the character, scale, and macroeconomic significance of digital native cash and applies a conventional framework that ignores information that clearly demonstrates USDT’s resilience, transparency, and world utility,” it mentioned in a press release.
Returning to S&P, the report famous that BTC presently accounts for about 5.6% of USDT's backing, exceeding its overcollateral margin of three.9%, elevating considerations {that a} sharp drop in value might result in a scarcity of collateral for the token.
The corporate's stablecoin reserves additionally embody gold, company bonds, secured loans, and different investments that contain various levels of credit score and market danger, S&P added. The company cited ceaselessly cited considerations concerning the lack of detailed public reporting on the valuation of those property and the creditworthiness of the banks and custodians that maintain them.
“Due to this fact, a decline within the worth of Bitcoin and a decline within the worth of different high-risk property might scale back reserve protection and result in USDT undercollateralization,” the report mentioned.
Tether’s USDT is the biggest stablecoin in circulation, with a market capitalization of over $180 billion. It performs a central function within the world cryptocurrency market, particularly in rising economies the place entry to the US greenback is restricted. For years, considerations over the soundness and assist of USDT, sometimes called “Tether FUD,” have sparked debate amongst crypto watchers and regulators. Regardless of this, the USDT value has maintained its value peg, a degree acknowledged by S&P in its report.
Based on Tether's latest disclosures, USDT is backed by quite a lot of property, with 77% of its reserves comprised of U.S. Treasuries and cash-like property. Tether beforehand mentioned it deliberate to part out secured loans from its reserves by the tip of 2023. Nevertheless, in keeping with the most recent certificates signed by BDO Italy, these property nonetheless account for 8% of the underlying property (price over $14 billion) as of September 2025.
The U.S. Stablecoin Act (often known as the GENIUS Act) enacted this yr requires issuers to again their tokens on a one-to-one foundation with short-term U.S. Treasuries and liquid property corresponding to cash market funds and repurchase agreements.
Learn extra: ECB strengthens warning that stablecoins might pose world monetary dangers
