S&P Global's recent downgrade of USDt's ability to maintain its dollar peg has sparked a strong backlash from Tether's CEO, Paolo Ardoino, who vehemently disputes the agency's assessment. The controversy highlights fundamental differences in how financial stability is measured, particularly concerning the transparency and valuation of digital asset reserves, and has ignited a wider debate among market analysts about Tether's underlying financials.
CEO Challenges S&P's Assessment
Paolo Ardoino, CEO of Tether, swiftly rejected S&P Global's decision to rate USDt's peg as "weak," arguing that the rating agency failed to account for Tether's complete financial picture. Ardoino pointed to Tether Group's substantial assets, which stood at approximately $215 billion at the end of Q3 2025, significantly outweighing stablecoin liabilities of around $184.5 billion. He emphasized an additional $7 billion in excess capital, $23 billion in retained earnings as part of the Group's capital, and robust monthly core profits of roughly $500 million generated solely from U.S. Treasury yields. According to Ardoino, S&P's oversight of these crucial financial details led to an incomplete and inaccurate rating.
Conflicting Analyst Views on Tether's Stability
The S&P downgrade has also fueled discussions among market experts, revealing divergent views on Tether's long-term stability. Arthur Hayes, a prominent crypto analyst and BitMEX founder, expressed concern that Tether's substantial holdings in Bitcoin and gold, intended to offset declining U.S. Treasury yields, could pose a risk. Hayes warned that a significant correction—around 30%—in these asset positions might theoretically deplete Tether's capital, potentially leading to insolvency. Conversely, Joseph Ayoub, a former chief digital asset analyst at Citi, firmly rejected Hayes's analysis. Drawing on extensive research, Ayoub asserted that Tether possesses far more assets than publicly reported, operates an exceptionally lucrative business generating billions in interest income with a lean team of just 150 employees, and is, in fact, better collateralized than many traditional banks.
