Tether CEO Says TradFi “Growing Worried” Following USDT Rating

Tether CEO Paolo Ardoino says that the S&P Global Ratings agency’s downgrade of Tether’s USDT stablecoin is a sign that the traditional finance “propaganda machine is growing worried.” 

“The classical rating models built for legacy financial institutions, historically led private and institutional investors to invest their wealth into companies that despite being attributed investment grade ratings collapsed,” Ardoino wrote in a recent X post. 

“The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system,” he added. “No company should dare to decouple itself from it.”

He then said that Tether is the “first overcapitalized company in the financial industry, with no toxic reserves.” 

“Tether is living proof that the traditional financial system is so broken that it’s becoming feared by the emperors with no clothes,” Ardoino said. 

S&P Downgrades USDT’s Dollar Peg Rating To Lowest Score

Ardoino’s remarks come after S&P Global Ratings downgraded Tether’s USDT to the lowest score on its stablecoin stability scale, citing concerns around the token’s ability to maintain its peg to the US dollar. 

The “weak” assessment was due to several factors, including Tether’s decision to back its USDT token with “higher-risk” assets such as Bitcoin, gold, loans and corporate bonds that it believes are subject to higher volatility than the dollar. 

“Bitcoin represents 5.6% of USDT in circulation, exceeding the 3.9% overcollateralization margin associated with a collateralization ratio of 103.9%,” the ratings agency wrote in its report. 

“A decline in the price of bitcoin or the value of other higher-risk assets could therefore reduce collateral coverage.” it went on to warn. 

Breakdown of the assets backing USDT (Source: S&P Global Ratings)

The ratings agency also highlighted that Tether is headquartered in El Salvador and regulated according to the National Commission of Digital Assets (CNAD), which it says has looser requirements for reserve assets. 

Another issue that was highlighted by the S&P Global Ratings is the lack of sufficient audits or proof-of-reserve reports for Tether’s USDT. 

Despite the weak rating, the agency did add that 75% of USDT’s backing comes from US Treasurys and other short-term financial instruments that are regarded as “low-risk.” 

Report Comes Amid Landmark Year For Stablecoins

The report from S&P Global Ratings follows what has been a record year for stablecoins. 

The space started to gain substantial momentum after US President Donald Trump signed the GENIUS Act into law in July.  

Stablecoin market cap (Source: DefiLlama)

The regulatory clarity that the GENIUS Act provided the industry saw several major traditional finance firms start to explore stablecoins. This led to the capitalization of the stablecoin market soaring to above $300 billion for the first time. 

Amid the boom in the stablecoin market, Tether’s USDT has maintained its dominance. Currently, the stablecoin accounts for over 60% of the market, or around $184.529 billion, data from DefiLlama shows. The next-biggest stablecoin is Circle’s USD Coin (USDC), which has a capitalization of over $75.48 billion.

Tether Acting Like A Central Bank

Along with its dominant position in the stablecoin market, Tether is also the 17th-largest holder of US Treasurys in the world, with over $112 billion in short-term US government securities. This puts it ahead of most countries, including South Korea, Saudi Arabia, and Germany, according to Ardoino. 

With 135 billion of U.S Treasuries, Tether is now the 17th largest holder of U.S debt, passing also South Korea.
Soon Brazil! pic.twitter.com/wUDyvGcSHE

— Paolo Ardoino 🤖 (@paoloardoino) October 29, 2025

Tether has also been accumulating large amounts of gold. Jefferies recently estimated that the stablecoin issuer holds around 116 metric tonnes of gold, which makes it “the largest private-sector gold holder outside central banks.” 

In the third quarter this year alone, the stablecoin firm reportedly added 26 tonnes, which was approximately 2% of the global gold demand during that period.

However, the company has not only acquired substantial amounts of bullion, but has also reportedly acquired a large equity stake of up to 37.8% in a gold-royalty company as part of its broader push to grow its mining sector exposure and tokenized-gold infrastructure. 

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