Tether CEO Paolo Ardoino has forcefully responded to Standard & Poor's (S&P) recent downgrade of the stablecoin's peg stability, describing the decision as stemming from "hostility" toward Tether's business model and accusing the traditional financial sector of failing to grasp how the company operates
as reported
. S&P lowered USDT's rating from "constrained" to "weak," pointing to the stablecoin's increased allocation to higher-risk assets such as
Bitcoin
and gold, which now make up
5.6% of Tether’s $184 billion market value
. The agency cautioned that a downturn in these assets could leave USDT insufficiently backed, and also noted shortcomings in transparency regarding reserve management and counterparties
as outlined in the report
.
However, Tether’s financial disclosures present a contrasting narrative. The company posted net profits surpassing $10 billion in the first three quarters of 2025, with $174 billion in liabilities supported by $6.8 billion in surplus reserves and $135 billion invested in U.S. Treasuries
based on financial statements
. Ardoino highlighted that Tether ranks as the 17th-largest holder of U.S. government debt, describing the company as "the first overcapitalized entity in the financial sector" and emphasizing the absence of "toxic" assets in its holdings
according to the CEO
. The firm also revealed a share repurchase initiative and has applied for an investment fund license in El Salvador, where its headquarters are located
as reported in business news
.
The S&P downgrade has reignited discussions about stablecoin oversight and transparency. While the majority of USDT’s reserves are still held in short-term Treasuries and cash-like assets, the agency faulted
Tether
for not separating assets to shield against insolvency and for lacking a comprehensive regulatory structure
according to the analysis
. Ardoino rejected these criticisms, asserting that the conventional financial system is "broken" and that Tether’s achievements challenge outdated views on capital adequacy and risk
as stated by the CEO
. He also accused rating agencies of steering investors toward "risk" and failing to adapt to the realities of the crypto era
according to the CEO’s remarks
.
This dispute arises as global regulators increase their scrutiny of stablecoins.
Thailand is preparing to roll out a pilot project enabling tourists to exchange cryptocurrencies for baht through a regulated platform, while Australia has introduced legislation to create a regulatory framework for digital asset exchanges and token custody services
as noted in market updates
. These moves highlight the increasing integration of digital assets into mainstream finance, even as debates over oversight and risk controls continue.
Tether’s ability to keep its dollar peg is crucial to its leading position among stablecoins. With the values of Bitcoin and gold fluctuating amid broader market swings, the company’s approach of diversifying reserves and building institutional relationships could be key to its long-term strength
according to financial experts
. For now, Ardoino’s assertive defense—emphasizing Tether’s profitability and clean asset portfolio—casts the company as a challenger to the credibility of traditional finance, even as regulators and rating agencies demand more openness.
