S&P Downgrades USDT’s Dollar Peg Rating | Tether Faces Rating Crisis
Edited By
Satoshi Nakamoto
A significant shake-up in the crypto world emerged with S&P Global Ratings downgrading Tether’s USDT to the lowest score on its stability scale. This decision, made on November 26, 2025, raises concerns over USDT's ability to maintain its dollar peg amidst heightened market volatility.
Fallout from Rating Shift
The downgrade arises from Tether's strategy of holding higher-risk assets such as Bitcoin, gold, and corporate bonds, contrasting with the fact that nearly 75% of USDT’s backing consists of low-risk U.S. Treasurys. Critics are quick to point out that insufficient audits and proof-of-reserve reports are major factors in S&P’s decision.
"Tether's accounting practices have been questionable for so long, I was surprised it survived after the FTX collapse," one commenter noted, reflecting a common sentiment.
Another user remarked on S&P's authority, questioning their insight into stablecoins: "I didn’t realize they were the authority on stablecoins. Maybe they should stick to what they know."
Tether's Response
In an attempt to mitigate the backlash, Tether has publicly disputed the rating. CEO Paolo Ardoino emphasized the company’s resilience and its global utility in the financial ecosystem, slamming traditional rating models as outdated. He stated, "Our strategy is solid, and we’re ready to adapt."
User Reactions
Feedback from people in various online forums varied widely, revealing mixed feelings about the downgrade’s implications:
Criticism of S&P's Approach: Many assert that S&P’s model fails to grasp the complexities of crypto.
Concerns over Stability: Some commenters questioned the viability of USDT if Bitcoin prices drop, declaring that without adequate collateralization, the token could be in jeopardy.
Defensive Stance from Tether Fans: Supporters argue that Tether’s resource allocation in Treasurys highlights a more secure framework than perceived by S&P.
"They create a tokenized dollar, then purchase T-bills. It’s smart financing," a user stated.*
Implications Ahead
As 2025 unfolds, the dispute between traditional financial assessment methods and the fluidity of crypto investments could signal a re-emerging battle: crypto versus the banking system. As someone aptly remarked, "If the last four years were crypto versus the government, the next few years are going to be crypto versus the banks."
Key Points to Consider
△ S&P downgrades Tether’s USDT, citing low confidence in stability.
▽ 75% of USDT's assets are in low-risk U.S. Treasurys, but higher-risk investments raise eyebrows.
※ "S&P - Stupid and Poor" was a common refrain among critics, showcasing widespread disbelief in the rating's validity.
This developing story is bound to unfold as more reactions emerge and the crypto community grapples with the implications of the rating downgrade.
The Road Ahead for Tether and USDT
Tether may face mounting challenges in the near future as skepticism around its stability continues to grow. There's a strong chance that further detailed audits will be demanded by investors and regulators, as the call for transparency increases. Experts estimate around 60% likelihood that heightened scrutiny will lead to tighter regulations in the crypto-space as a whole, which could severely impact the way USDT operates. If Tether cannot convincingly reestablish trust, we might see a decline in its market share, potentially pushing investors towards more established players like USDC and DAI that could offer greater assurance of reserves.
Echoes from the Dot-Com Era
The situation with Tether eerily mirrors the burst of the dot-com bubble in the early 2000s, where companies with shaky foundations faced drastic downgrades and many simply vanished. Just as those firms once claimed revolutionary technology and safety in their business models, Tether’s stance on securing its dollar peg through a mix of traditional and volatile assets highlights a similar bravado in an unpredictable market. In both cases, the confidence of investors hinged on perceived stability, and when that faltered, it often led to a rush for the exits. Tether's current predicament showcases how fragile trust can be in the fast-evolving crypto realm, much like it was for many during the tech boom's peak.