Tether’s USDT stability score cut to ‘weak’ level as S&P says reserves can’t absorb bitcoin drop
S&P Global Ratings downgraded Tether's USDT stability assessment to 'weak' due to increased riskier assets, including bitcoin.Summary
S&P Global Ratings downgraded Tether's USDT stability assessment to 5, the weakest level, because the stablecoin's reserves are no longer sufficient to absorb a significant drop in bitcoin's value. Bitcoin now constitutes about 5.6% of USDT in circulation, exceeding the implied 3.9% reserve buffer, meaning a material drawdown could leave USDT undercollateralized. Tether's riskier assets, including bitcoin and gold, rose to 24% of reserves as of September 30, up from 17% a year prior, contributing to the downgrade from last year's 'constrained' score. While much of the reserves remain in short-term U.S. Treasuries, S&P noted a lack of basic investor protections like asset segregation. The assessment could improve if Tether reduces high-risk exposures and enhances disclosure.
(Source：The Block)