S&P Global Rates Tether's Stability as 'Constrained'

USD Coin, Pax Dollar, and Gemini Dollar Receive 'Strong' Ratings in New Stablecoin Assessment

S&P Global Ratings has released an assessment of the stablecoin Tether, concluding that the digital currency's ability to maintain its peg to the U.S. dollar is 'constrained' due to concerns about its reserve transparency and risk appetite.
Tether's reserves include double-digit and opaque exposure to riskier assets, which could lead to potential exposure to credit, market, currency, and interest risks that cannot be quantified.
S&P Global Ratings provided scores for eight different stablecoins in total, with USD Coin (USDC), Pax Dollar (USDP), and Gemini Dollar (GUSD) all receiving the best scores of 2 or 'Strong'.
Tether (USDT), the largest stablecoin by market capitalization, and Dai, the fourth most widely used, were given 'constrained' 4 scores, while TrueUSD, the fifth most popular, was graded a 'weak' 5.
S&P Global's risk scale for stablecoins ranges from 1 to 5, focusing on the qualities and drawbacks of each stablecoin, including the assets backing them, regulation and supervision, governance, transparency, and 'liquidity and redeemability'.