S&P Global assigned Tether’s USDT a “5 (weak)” stability score, citing persistent disclosure gaps and rising exposure to higher‑risk reserve assets (bitcoin, gold, secured loans, corporate bonds). S&P said bitcoin comprises ~5.6% of reserves—exceeding Tether’s 3.9% overcollateralization buffer—and warned that price drops in risky assets could leave USDT undersecured, while noting most reserves are held in short‑term U.S. Treasuries and cash equivalents. S&P flagged limited transparency around custodians, counterparties and banking partners and said the score could improve if Tether reduces risky holdings and provides more reserve detail. Tether CEO Paolo Ardoino pushed back on X, calling the rating model inappropriate for an “overcapitalized” firm, asserting no “toxic reserves” and that Tether is profitable. Tether remains the largest stablecoin by market cap.

S&P’s explicit “5 (weak)” score and cited facts (disclosure gaps; rising exposure to bitcoin, gold, secured loans and corporate bonds; bitcoin = ~5.6% of reserves exceeding the 3.9% overcollateralization buffer; warning of potential undercollateralization) create a negative signal for USDT. Offsetting facts—most reserves held in short‑term U.S. Treasuries/cash and a public CEO rebuttal claiming overcapitalization and profitability—reduce the immediacy and magnitude of market impact, yielding a moderate impact score.