In a significant development for the stablecoin market, S&P Global Ratings has downgraded Tether’s USDt to its lowest possible stability score, citing heightened risks to its U.S. dollar peg. The rating agency’s assessment highlights ongoing concerns about the reserve backing and operational transparency of the world’s largest stablecoin issuer. Tether Holdings Limited promptly responded to the downgrade, characterizing the report as “misleading” and reaffirming its commitment to maintaining the 1:1 dollar peg. Market analysts note that this downgrade could impact institutional confidence in USDt, particularly given its substantial market capitalization and widespread use across cryptocurrency exchanges. The stablecoin’s reserve composition and audit practices have long been subjects of regulatory scrutiny, with this latest rating action potentially influencing future regulatory frameworks for digital assets. Despite the downgrade, USDt continues to maintain its dollar parity in secondary markets, though trading volumes show increased volatility following the announcement. The situation underscores the evolving landscape of cryptocurrency ratings and the critical importance of transparency in stablecoin operations.
