Tether CEO Paolo Ardoino has pushed back strongly against S&P Global following its decision to downgrade USDT’s dollar-peg stability. He argued that the rating—lowered from level 4 (“constrained”) to 5 (“weak”)—relied on what he described as outdated legacy models, incomplete data, and an inaccurate representation of Tether’s financial position.
S&P’s downgrade, issued on November 26, placed USDT at the bottom of its 1–5 rating scale. The agency pointed to what it classified as “high-risk assets” in Tether’s reserve composition, including Bitcoin, gold, corporate bonds, secured loans, and other assets carrying credit or market risk. It also noted rising exposure outside traditional money-market holdings.
The move surprised much of the industry, given USDT’s long history of maintaining its peg during volatile market cycles and serving as the most widely used settlement asset across global crypto exchanges.
Ardoino Argues S&P Ignored Core Reserves, Equity, and Revenue Strength
In response, Ardoino dismissed the report as incomplete, stating that S&P failed to account for the full asset structure of Tether Group, including substantial equity and long-term buffers.
According to Ardoino, Tether held at the end of Q3 2025:
- •Approximately $184.5 billion in stablecoin reserves
- •Around $23 billion in retained earnings
- •Roughly $7 billion in excess equity
- •An additional $7 billion in secondary reserve buffers
He claimed that these numbers demonstrate Tether is over-collateralized, not under-secured, and that critics continue to rely on outdated narratives about insufficient backing.
Ardoino also highlighted Tether’s powerful revenue engine. With significant exposure to U.S. Treasuries, the company is earning around $500 million per month from government debt yield alone—a figure that has grown in tandem with its holdings of short-term U.S. securities.
He argued that this recurring income was largely overlooked in S&P’s assessment, despite being central to Tether’s growing financial strength.
Critics Renew Concerns Over Asset Allocation
The downgrade reignited debate among analysts who have long scrutinized Tether’s non-traditional reserve components.
Arthur Hayes, former BitMEX CEO, hinted that Tether may be accumulating more gold and Bitcoin. He warned that a steep decline—30 percent or more—in these assets could materially impact the company’s equity and potentially expose USDT to stress conditions.
However, other experts countered the bearish outlook. Joseph Ayoub, former top digital asset analyst at Citi, stated that after years of studying Tether, he believes the company remains significantly stronger than its critics suggest. He emphasized that:
- •Tether’s reserves exceed its liabilities
- •Large portions of its equity are not included in public snapshots
- •The company generates billions in interest income with fewer than 150 employees
- •USDT is better collateralized than most traditional banks
Ayoub’s view highlights a split in analyst sentiment—between those concerned about Tether’s diversification into riskier assets and those confident in the company’s balance-sheet structure.
Market Implications
USDT remains the dominant stablecoin globally, underpinning billions in daily trading volume across exchanges. Any shift in confidence—even if temporary—can influence liquidity, trading spreads, and broader market sentiment.
As of now, Tether maintains that its reserves, equity position, and revenue output place it on solid financial footing, despite S&P’s downgrade.