Tether CEO Fires Back at S&P: Defending USDT Amid Stability Score Drop

The world’s largest stablecoin issuer, Tether, is once again in the spotlight after S&P Global downgraded USDT’s dollar-peg stability score to its lowest level. The move triggered market-wide discussions about stablecoin resiliency, transparency, and systemic risk. In a sharp response, Tether CEO Paolo Ardoino criticized the rating as misleading, outdated, and unrepresentative of the company’s real financial strength.

This article examines the controversy, analyzes S&P’s rationale, explores expert opinions, and assesses what the downgrade might mean for USDT, crypto markets, and investor confidence in 2025.

Tether CEO Strongly Rejects S&P’s “Weak” Rating

Paolo Ardoino accused S&P Global of relying on “outdated legacy models” and ignoring the core fundamentals behind USDT. He argued that the downgrade overlooked several key components of Tether’s financial position:

• $7B in excess equity as of Q3 2025

• $184.5B in stablecoin reserves

• $23B in retained earnings across the Tether Group

• An additional $7B reserve buffer held in alternative assets

According to Ardoino, these figures reveal a far stronger balance sheet than critics suggest. He stated that USDT is backed by substantially more assets than what S&P accounted for, and accused the agency of using incomplete data to form its assessment.

Ardoino also said S&P ignored Tether’s “powerful revenue engine,” which generates around $500 million monthly from U.S. Treasury yields alone, a result of Tether’s large exposure to short-term U.S. government debt.

Why S&P Downgraded USDT’s Peg-Stability Score

On November 26, S&P downgraded USDT’s peg-stability rating from 4 (“constrained”) to 5 (“weak”), marking its second downgrade since March. This is the lowest possible score under the agency’s 1–5 scale introduced in 2023.

S&P cited:

• Growing allocations to high-risk assets

• Exposure to Bitcoin, gold, secured loans, and corporate bonds

• Increased credit, market, interest-rate, and FX risk

• Structural limitations of digital assets as collateral

The agency’s stance implies that the diversification of reserves, once seen as a strength, may now introduce vulnerabilities during periods of market stress.

Analysts were quick to warn that the downgrade could erode confidence in a stablecoin that underpins billions in daily trading volume across global crypto markets.

READ ALSO: Step by Step Guide to Buying US Treasury Bonds

Expert Opinions: Concerns, Defenses, and Contradictions

The downgrade reignited longstanding debates around Tether’s reserve composition and transparency.

Concerns From Market Analysts

Some experts worry that Tether holds too much exposure to volatile non-traditional assets.

Arthur Hayes suggested that Tether may be accumulating more Bitcoin and gold to offset lower returns as U.S. Treasury yields decline.

He warned that a 30%+ drop in BTC or gold could wipe out Tether’s equity, theoretically threatening USDT’s solvency.

Defenses From Industry Specialists

Other analysts dismissed these concerns as exaggerated.
Joseph Ayoub, a former top digital-asset analyst at Citi, countered that:

• Tether’s reserves exceed its outstanding liabilities

• Much of its equity is not reflected in public summaries

• The company earns billions in annual interest

• Tether is better collateralized than many traditional banks

He emphasized that Tether’s business model, driven by massive holdings of U.S. Treasuries, is one of the most profitable in global finance, despite its small workforce of roughly 150 employees.

Does the S&P Downgrade Impact USDT’s Stability?

The downgrade has heightened market scrutiny, but real-world usage tells a different story.

USDT continues to function as the primary trading pair across exchanges and remains the most relied-upon digital dollar in the industry.

However, the perception of risk matters. Even small cracks in confidence can spark withdrawal pressures, especially during market turbulence.

While Tether’s fundamentals remain strong according to internal data and supportive analysts, the S&P decision may push institutions to demand greater transparency and more detailed reserve reports.

READ ALSO: Buy Tether USDt (USDT) Instantly with a Credit or Debit Card

Conclusion

The S&P downgrade of USDT has intensified scrutiny on the world’s largest stablecoin, but Tether CEO Paolo Ardoino’s strong rebuttal highlights an entirely different picture — one of substantial reserves, massive revenue, and a complex corporate structure that S&P may not have fully captured.

Whether the rating truly reflects USDT’s risk profile remains a matter of debate. What is clear is that transparency, reserve composition, and evolving regulatory expectations will play a central role in shaping USDT’s stability narrative in 2025.

For more in-depth crypto market updates and predictions, check out the latest posts on the Bitrue blog — or explore trading directly on Bitrue’s platform.

FAQ

Why did S&P downgrade USDT’s stability score?

Because of increased exposure to high-risk assets and structural risks associated with digital-asset collateral.

How did Tether’s CEO respond?

Paolo Ardoino said the rating was based on incomplete data and failed to capture Tether’s true financial strength.

Is USDT still considered safe?

It remains widely used and stable, but concerns around reserve transparency persist.

Does Tether really earn $500M per month?

Yes, primarily from interest on U.S. Treasury holdings.

Will the downgrade impact USDT adoption?

Unlikely in the short term, but institutional users may demand more transparency going forward.