Tether CEO Defends USDT Backing Amid S&P Downgrade

Tether CEO Paolo Ardoino, along with several market analysts, disagreed with S&P Global’s recent decision to lower its rating of USDT’s ability to stay equal in value to the US dollar. They argued that the ratings agency didn’t look at all the assets and revenue that Tether has.

According to Ardoino, Tether Group held about $215 billion in total assets at the end of Q3 2025. During the same period, it had $184.5 billion in stablecoin liabilities, meaning the amount of USDT issued. He explained that Tether had around $7 billion in extra equity on top of the reserves supporting USDT, plus another $23 billion in retained earnings within the wider Tether Group.

This dispute began when S&P Global expressed concerns about the risk level connected to USDT. Some influencers repeated these claims online, which caused new doubts about whether USDT is properly backed. In response, Ardoino strongly rejected the concerns, saying they were based on incorrect assumptions and were creating unnecessary fear among users.

Ardoino added that S&P repeated the same mistake by ignoring Tether’s extra Group Equity and the about $500 million in monthly profits the company earns from U.S. Treasury yields. Earlier, S&P Global had downgraded USDT’s ability to hold its 1:1 value with the U.S. dollar, giving it a “weak” rating the lowest score on its scale. This downgrade caused some analysts to express fear and uncertainty about Tether, especially since the company plays a major role in the overall crypto market.

Analyst Raises Concerns About Tether’s Investment Strategy

Arthur Hayes, a well-known market analyst and founder of the BitMEX crypto exchange, suggested that Tether may be buying a lot of gold and Bitcoin to make up for the lower income it earns now that U.S. Treasury yields have dropped. Hayes explained that when the Federal Reserve cuts interest rates, assets like gold and Bitcoin usually rise in value. If that happens, Tether’s strategy could work in its favor. However, he also warned that this approach carries serious risk.

According to Hayes, if the value of Tether’s gold and Bitcoin holdings fell by about 30%, it could wipe out the company’s equity. In that scenario, he said, USDT could theoretically become insolvent, meaning it might not have enough assets to fully back the stablecoin.

However, Joseph Ayoub, who previously served as the lead digital asset analyst at major financial firm Citi, disagreed with Arthur Hayes’ comments. He said he spent “hundreds of hours” studying Tether while working at Citi and believes Hayes’ concerns are not accurate.

According to Ayoub, Tether actually has more assets than the public often sees in reports. He also explained that the company earns billions of dollars in interest each year, despite having only around 150 employees. Because of this strong income and large asset base, Ayoub argued that Tether is in a healthier financial position than many traditional banks and is backed by more than enough collateral to support USDT.

This moment highlights a deeper issue in the stablecoin world, the need for clear, consistent, and verifiable reporting. Users want to know what backs the token they are holding, whether it is cash, government bonds, or other assets. Without transparency, trust weakens over time. Some new stablecoins are already trying to differentiate themselves by offering frequent audits and public proof-of-reserve reports.

At the same time, USDT’s scale makes it impossible to ignore. It remains widely used across Asia, Latin America, Africa, and emerging markets where people rely on stablecoins to protect their savings from currency instability. For these users, the debate is not just technical, it affects real financial decisions.

Confidence Is Essential, and Clarity Is the Path Forward

The recent dispute over USDT’s rating underscores how critical transparency and trust are for stablecoins. While concerns from S&P and some analysts highlight potential risks, Tether’s leadership and independent analysts argue that the company remains well-capitalized, profitable, and sufficiently backed. For users and investors, this situation serves as a reminder that understanding the assets, reserves, and financial strategies behind a stablecoin is just as important as its market price or popularity. USDT continues to play a crucial role in global crypto markets, especially for those relying on digital dollars to preserve value in volatile economic environments.

Given the ongoing debate about USDT’s backing and strategy, how do you evaluate stablecoin safety before using or investing in one?