The post Tether’s USDT Downgrade Brings Old Arguments Back to the Front appeared on BitcoinEthereumNews.com.

So old and crusty are concerns that Tether is either not being upfront about the reserves backing its USDT stablecoin or faces imminent threat of being undercapitalized, that the crypto industry has developed its own two-word dismissive response: “Tether FUD.” Through soaring bull markets, the most brutal of bear markets, the comings and going of charlatans like Sam Bankman-Fried, Alex Mashinsky, and dozens of others, Tether’s USDT has continued to grow and function as designed — pegged to the U.S. dollar and available for redemption at any time. Alongside, Tether has become one of the globe’s most profitable companies, earning more than $10 billion through the first nine months of 2025, similar levels to those of Wall Street titans Goldman Sachs and Morgan Stanley. The current bear market (and stop saying “zoom out,” it’s a bear market), though, has some in traditional finance sharpening their nails yet again. During the sleepy session the day before Americans celebrated Thanksgiving, S&P Global slashed the rating on Tether’s USDT from 4 to 5, the weakest level on its stablecoin stability scale (yes, the agency whose ratings shenanigans helped enable the global financial crisis has a stablecoin stability scale). Behind the downgrade were usual concerns about the opacity of Tether’s reporting combined with something somewhat new: bitcoin now compromises more than 5% of the reserves backing USDT — thus continued declines in BTC’s price could lead to potential undercollateralization. There’s smoke. Any fire? “We wear your loathing with pride,” said Tether CEO Paolo Ardoino, shortly after the S&P move. Taking note of the well-trodden previous failures of ratings agency models, Ardoino said, “the traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system … Tether instead built the first overcapitalized company in…

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Filed under: News - @ November 30, 2025 2:26 pm