Not long ago, S&P Global Ratings gave Tether\'s USDT a score

📌 Not long ago, S&P Global Ratings gave Tether’s USDT a score of 5 (weak)” in its stability rating among stablecoins, which corresponds to the lowest step in this five-step system.

The firm said that the downgrade was due to ongoing disclosure deficiencies and a growing share of higher-risk assets in Tethers collateral, which includes bitcoin, gold, secured loans and corporate bonds. The paper also said that USDTs openness and management techniques are inferior to competitors like the USDC. . Tether

The firm said that the downgrade was due to “ongoing disclosure deficiencies” and a growing share of “higher-risk assets” in Tether’s collateral, which includes bitcoin, gold, secured loans and corporate bonds. The paper also said that USDT’s openness and management techniques are inferior to competitors like the USDC.

Ardoyno reacted to X’s decision by stating that Tether “will wear your dislike

proudly.

He went on to criticize the established rating systems used in traditional finance, arguing that they have historically led investors to firms that subsequently failed, leading regulators to question the independence and impartiality of key rating structures.

He also suggested that the low rating was due to the old financial sector’s inability to tolerate a certain company seeking to disassociate itself from a failing financial system. The CEO also defended Tether, noting that it is the industry’s first overcapitalized firm to operate without harmful reserves and remain profitable.

Tether is a prime example of how hopelessly outdated the financial system is, which scares even those who are dressed in the non-existent, he added.

Tether is a clear example of the hopelessness of an outdated financial system that frightens even those who are dressed up as non-existent.

In its review of stablecoin stability, S&P explains that bitcoin (BTC)’s share of circulating USDT now stands at around 5.6 percent, exceeding the reserve of 3.9 percent. The agency warned that cheapening BTC or other risky investments, including corporate bonds, precious metals or collateralized loans, could lead to an undercollateralization of USDT, and reducing reserve coverage would only exacerbate this threat.

Among other things, a substantial portion of USDT collateral is held in short-term U.S. Treasury securities and other U.S. dollar cash equivalents. Despite this, S&P believes that the issuer of the stablecoin continues to provide limited information about the financial strength of its custodians, transaction partners and banking entities, contributing to the low ranking.

The report also states that the score could be improved if Tether reduces its exposure to risky assets and provides clearer information about its custodians and partners. USDT maintains its position as the leading stablecoin with a capitalization of $184 billion.