Tether CEO Paolo Ardoino and several market analysts have disputed S&P Global’s decision to downgrade USDt’s ability to maintain its US dollar peg.
The downgrade, which classified the stablecoin’s peg strength as “weak,” sparked debate across the digital-asset sector due to the company’s central role in day-to-day crypto liquidity.
Ardoino argued that S&P Global failed to incorporate the full scope of Tether Group’s financial position.
According to the company’s Q3 2025 attestation report, the Group held about $215 billion in total assets at the end of the quarter, compared to roughly $184.5 billion in stablecoin liabilities.
He stated: “Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity.
S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone.”
Market Analysts Weigh In on Tether’s Reserves
The downgrade renewed long-standing debates around Tether’s balance sheet composition.
Arthur Hayes, founder of BitMEX, suggested Tether may be accumulating gold and Bitcoin to offset declines in Treasury-generated revenue as interest rates fall.
Hayes warned that sharp corrections in those assets could pressure the company’s equity.
“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.
His comments echoed concerns that Tether’s diversification strategy could amplify risks during periods of market stress.
Counterarguments From Former Citi Analyst
Joseph Ayoub, former lead digital-asset analyst at Citi, disputed Hayes’ assessment.
Ayoub said he spent “hundreds” of hours reviewing the company’s structure and operations and argued that the concerns were overstated.
He noted that Tether generates billions in annual interest income while operating with only about 150 employees, creating unusually high profitability for a financial firm.
Ayoub also said the company is better collateralized than many traditional banks due to its substantial excess assets.
His position reflects a broader view among some analysts that the S&P rating does not fully capture the company’s revenue streams or balance-sheet strength.
Ongoing Debate Over Transparency and Stability
The dispute arrives at a time when stablecoins continue to grow as a foundational layer of global crypto liquidity.
USDt remains the most widely used stablecoin in the world, and concerns about its stability quickly ripple across exchanges, lenders, and trading platforms.
Tether maintains that its attestation data supports confidence in the peg, while critics continue to call for more granular transparency.
The rating downgrade has intensified these discussions heading into 2026, ensuring that Tether’s reserve disclosures will remain under scrutiny.
