Tether CEO Disputes S&P USDT Downgrade Over High-Risk Assets and Reserves
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Tether CEO Paolo Ardoino criticized S&P Global’s downgrade of USDT’s peg stability rating, calling it based on outdated models and incomplete data. He highlighted Tether’s $7 billion excess equity, $184.5 billion reserves, and $23 billion retained earnings to affirm the stablecoin’s robust backing and financial strength beyond critics’ assumptions. S&P Global downgraded USDT’s peg-stability rating to “weak” on November 26, 2024, citing high-risk assets like Bitcoin and gold. Tether generates about $500 million monthly from U.S. Treasury yields, bolstering its revenue amid expanding reserves. Experts like Joseph Ayoub from Citi note Tether’s reserves exceed debt, with billions in interest income from a lean operation of 150 staff, outperforming many traditional banks in collateralization. Discover why Tether CEO slams S&P’s USDT downgrade as flawed. Explore robust reserves, expert insights, and stablecoin stability amid market concerns—stay informed on crypto finance today. What is the Reason Behind S&P’s Downgrade of Tether’s USDT Stablecoin Rating? S&P Global downgraded Tether’s USDT peg-stability rating from “constrained” to “weak” on November 26, 2024, marking the second such action since March 2023. The agency pointed to increasing allocations in high-risk assets, including cryptocurrencies like Bitcoin, precious metals, corporate bonds, and secured loans, which introduce credit, market, interest-rate, and foreign-exchange risks. This assessment surprised industry observers, given USDT’s history of maintaining its $1 peg through volatile market conditions. How Does Tether Respond to the USDT Downgrade Criticism? Tether CEO Paolo Ardoino vehemently disputed S&P’s evaluation, labeling it as reliant on “outdated legacy models” and incomplete information that fails to capture the company’s true financial health. He emphasized that at the end of Q3 2024, Tether held approximately $7 billion in excess equity on top of $184.5 billion in stablecoin reserves, plus $23 billion in retained earnings within the broader Tether Group. Ardoino argued these figures demonstrate USDT is backed…
