Overview
- S&P lowered USDT’s stability assessment from 4 (constrained) to 5 (weak), the bottom of its 1–5 scale.
- S&P cited rising allocations to bitcoin, gold, secured loans and corporate bonds with limited disclosures, warning that declines in these assets could leave USDT undercollateralized.
- Tether’s latest disclosures show cash equivalents at about 77.23% of reserves, with secured loans at 8.06%, precious metals at 7.13% and bitcoin at 5.44%, alongside recent purchases of 26 tonnes of gold and nearly 9,849 BTC.
- Tether says about $184 billion of USDT is outstanding and maintains it holds sufficient reserves for redemptions, while disputing S&P’s methodology and characterization.
- Despite the downgrade, S&P noted USDT has exhibited notable price stability during periods of crypto market volatility.