Tether's USDT Stability Rating Lowered
S&P Global Ratings downgraded Tether Ltd.'s USDT stability from 'Constrained' to 'Weak' on November 26, 2025, reflecting increased risk due to high-risk assets in Tether's reserves.
The downgrade signals higher vulnerability of USDT's peg to USD, raising caution in markets, though no immediate depeg is expected, according to analysts and experts.
Details of the S&P Global Ratings Decision
The recent adjustment by S&P Global Ratings lowered Tether's USDT stability rating from “Constrained” to “Weak”. They cited increased exposure to high-risk assets within Tether's reserve portfolio.
S&P Global Ratings is the entity behind this decision. Tether Ltd., led by CTOs Jude Maxwell and Paolo Ardoino, has yet to make direct statements addressing these changes. The company is challenging the downgrade framework as outdated.
Market Impact and Expert Opinions
The downgrade impacts market perceptions of USDT's stability but hasn't yet caused a major shift in its use. On-chain data does not reflect immediate liquidity changes, although scrutiny remains high. Paolo Ardoino, Chief Technology Officer, Tether Ltd., stated, "While the downgrade signals caution, it should not be misinterpreted as an indication of imminent risk to our peg."
Experts suggest that this rating adjustment indicates a greater financial risk linked to USDT, though no immediate depeg is anticipated. Institutional investors remain largely unaffected in their dealings with Tether.
This is a significant development for one of the largest stablecoins. The market will be watching closely for Tether's response and any potential impact on its peg. #USDT #Tether #Stablecoin #Crypto
— Glassnode (@glassnode) November 26, 2025
Broader Implications for Stablecoins and Regulation
The downgrade may inform future regulatory assessments of stablecoins, potentially influencing broader market policies. It highlights the need for greater reserve transparency and risk assessment at major crypto entities.
Historically, stablecoin downgrades have caused temporary volatility but no lasting devaluation. As the largest stablecoin, USDT faces scrutiny over its reserve allocations. This situation underscores the importance of opaque asset management to forestall regulatory interventions.
We are actively engaging with S&P Global Ratings and believe their current assessment framework does not fully capture the strength and stability of USDT's reserves. We remain committed to transparency and maintaining the integrity of our peg. #Tether #USDT
— Paolo Ardoino (@paoloardoino) November 26, 2025