Tether, the entity behind the world’s largest stablecoin by market capitalization, USDT, has experienced a downgrade in its rating by S&P Global. This decision, made public on Wednesday, stems from what the agency describes as “persistent gaps in disclosure” and a growing allocation of “high-risk assets” within Tether’s reserves. 

The assets highlighted include Bitcoin (BTC), gold, corporate bonds, secured loans, and other investments, all of which entail various risks, including credit, market, interest rate, and foreign exchange vulnerabilities.

Tether CEO Responds To S&P Downgrade

In a recent research note, S&P Global detailed that this upgrade came as part of a new assessment scale implemented in 2023, ranging from 1 to 5. This scale evaluates the risk associated with different stablecoins. 

Following the assessment, S&P rated Tether’s USDT stablecoin as “5 (weak),” marking it as the lowest possible score and down from its previous rating of “4 (constrained).” S&P expressed concerns regarding the limited insight Tether provides into the creditworthiness of its custodians and counterparties. 

Despite this, Tether’s CEO, Paolo Ardoino, responded in a social media post on X (formerly Twitter) stating, “We wear your loathing with pride.” He argued that traditional credit rating methods used by agencies like S&P arose from a system that has faltered, leading regulators to challenge these legacy models. 

Ardoino contended that Tether stands out as a “overcapitalized” organization within the financial sector, claiming it does not harbor “toxic reserves.” He further suggested that S&P’s methods are better suited for conventional banks and insurers with opaque financial histories, rather than being applicable to digital asset issuers who operate under different reserve structures.

Ardoino’s remarks indicate a belief that the agency’s downgrade indicates discomfort within traditional finance toward entities like Tether that aim to transcend a “broken financial system.” The firm’s CEO noted: 

The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system. No company should dare to decouple itself from it.

Largest Independent Gold Holder

In the aftermath of the downgrade, Tether strongly rejected S&P’s characterizations, emphasizing its resilience through various financial crises, including banking collapses, exchange failures, liquidity challenges, and extreme market fluctuations—all while maintaining full stability and the ability to redeem USDT.

Tether also pointed to its issuance of approximately $184 billion worth of USDT, assuring stakeholders that it holds sufficient reserves, including US Treasuries and other assets, to satisfy redemptions. 

Notably, recent reports from the Financial Times reveal that Tether has emerged as the largest independent holder of gold globally, highlighting the firm’s increasing exposure to non-traditional reserve assets.

According to the report, the stablecoin issuer bought more gold in the last quarter of the year than any central bank in the world. The figures show that the firm bought 26 tons of gold, adding to its substantial gold reserve of nearly 120 tons. 

Featured image from DALL-E, chart from TradingView.com 

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Filed under: Bitcoin - @ November 27, 2025 12:34 am