S&P gives USDT lowest stability rating…Collateral composition risk has grown

Tether's dollar-pegged stablecoin USDT received the lowest stability rating from credit rater S&P, bringing collateral composition and transparency risks back into focus.

According to a Cointelegraph report on the 26th (local time), S&P said USDT includes a significant proportion of volatile assets such as gold, Bitcoin, loans, and corporate bonds, rating its ability to maintain the peg as "weak." The report noted that Bitcoin accounts for 5.6% of total reserves and could offset the collateral excess ratio.

S&P also pointed out that Tether is under El Salvador's regulatory regime, where reserve asset requirements are lax, and that a lack of sufficient audits or clear reserve reporting is another factor reducing stability. However, it added that 75% of reserves are composed of short-term safe assets such as U.S. Treasuries.

Tether strongly objected to the assessment. The company said the report failed to reflect USDT's global usage and real-world payment demand, calling it a "misleading analysis." CEO Paolo Ardoino also referenced cases where credit ratings assigned to traditional financial institutions did not prevent market collapses, pointing out limitations of the rating model itself.

USDT has expanded its market share amid this year's stablecoin regulatory adjustments. In particular, after the passage of a U.S. stablecoin regulatory bill, issuance and redemption volumes surged, allowing it to maintain a leading position in the market. Stablecoin market capitalization recently exceeded $300 billion, a record high.

Tether increased its U.S. Treasury holdings to more than $112 billion, expanding to a scale that surpasses some national holders. It also holds 116 tonnes of gold, comparable to some central banks. This expansion of reserve assets has led to assessments that Tether is, in effect, approaching being a "digital dollar issuer."