Tether CEO and Analysts Dispute S&P Global’s Downgrade of USDt’s Dollar Peg
Summary:
Tether CEO Paolo Ardoino and market analysts have contested S&P Global’s downgrade of USDt’s ability to maintain its US dollar peg, arguing that the ratings agency overlooked Tether’s comprehensive financial assets and revenue streams. With $215 billion in total assets and $184.5 billion in stablecoin liabilities as of Q3 2025, Tether maintains $7 billion in excess equity and $23 billion in retained earnings. Ardoino emphasized that S&P failed to account for Tether’s robust financial position, including $500 million in monthly profits from US Treasury yields. Meanwhile, analysts debate Tether’s balance sheet dynamics, with some speculating on its investments in gold and BTC to hedge against falling yields, while others highlight its strong collateralization and profitability.
What This Means for You:
- Understand Tether’s financial resilience: Despite S&P’s downgrade, Tether’s excess equity and retained earnings suggest a stable foundation for USDt’s dollar peg.
- Monitor Tether’s investment strategy: Its move into gold and BTC could impact its stability and the broader crypto market.
- Assess market risks: A significant decline in gold or BTC prices could challenge Tether’s equity and solvency, affecting USDt holders.
- Stay informed about stablecoin regulations: Tether’s role in crypto infrastructure makes it a focal point for regulatory scrutiny and market confidence.
Original Post:
Tether CEO Paolo Ardoino and market analysts pushed back against S&P Global’s downgraded rating of USDt’s (USDT) ability to maintain its US dollar peg, saying that the ratings agency did not account for all of Tether’s assets and revenues.
The Tether Group’s total assets at the end of Q3 2025 totaled about $215 billion, while its total stablecoin liabilities were about $184.5 billion, according to Ardoino, who referenced Tether’s Q3 attestation report. He added:
“Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity.
S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone,” Ardoino continued.
S&P Global downgraded USDt’s dollar-peg rating to “weak” on Wednesday, the lowest score on its scale, prompting fear, uncertainty, and doubt from some analysts about the company, which has become a critical piece of crypto market infrastructure.
Related: Tether to accelerate push into commodity lending with cash, USDt credit
Analysts debate Tether’s balance sheet fundamentals
Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, speculated that Tether is buying large quantities of gold and BTC to compensate for income shortfalls produced by falling US Treasury yields.
As the Federal Reserve slashes interest rates, the gold and BTC should go up in value, Hayes said, but he also warned that a steep correction in these assets could spell trouble for Tether.
“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.
Joseph Ayoub, the former lead digital asset analyst at financial services giant Citi, said he spent “hundreds” of hours researching Tether as an analyst for the company, and rebuffed Hayes’ analysis.
Tether has excess assets beyond what it reports, has an extremely lucrative business that generates billions of dollars in interest income with only 150 employees, and is better collateralized than traditional banks, Ayoub said.
Magazine: GENIUS Act reopens the door for a Meta stablecoin, but will it work?
Extra Information:
1. Tether Transparency Report: Explore Tether’s detailed financial disclosures and attestations to understand its reserve composition and financial health.
2. S&P Global’s Rating Methodology: Review the criteria used by S&P Global to assess stablecoins like USDt.
3. Tether’s 2025 Profit Forecast: Learn about Tether’s revenue streams and growth projections in the stablecoin market.
People Also Ask About:
- Is USDt backed by real assets? Yes, Tether claims USDt is backed by a mix of cash, cash equivalents, and other assets.
- What is the risk of holding USDt? The primary risk is Tether’s ability to maintain its dollar peg, which depends on its asset reserves and market conditions.
- How does Tether make money? Tether generates income through interest on its reserves, primarily from US Treasury yields and other investments.
- Can Tether’s peg break? While unlikely, a significant market shock or asset devaluation could challenge Tether’s peg stability.
Expert Opinion:
According to industry experts, Tether’s financial resilience and strategic investments in gold and BTC position it to weather market volatility. However, its reliance on these assets introduces risks that could impact its long-term stability. The ongoing debate underscores the importance of transparency and robust asset backing in the stablecoin ecosystem.
Key Terms:
- Tether USDt dollar peg
- Tether financial reserves
- S&P Global rating downgrade
- Stablecoin market infrastructure
- Tether gold and BTC investments
- US Treasury yields impact
- Tether Q3 attestation report
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