Tether CEO Challenges S&P's Downgrade, Citing Clash With Traditional Finance's Misunderstanding

Tether's CEO Paolo Ardoino has launched a sharp rebuttal to Standard & Poor's (S&P) recent downgrade of the stablecoin's peg stability rating, calling the move a reflection of "loathing" toward the company's model and accusing traditional finance of misunderstanding its operations according to reports. S&P revised USDT's rating to "weak" from "constrained," citing increased exposure to high-risk assets like Bitcoin and gold, which now account for 5.6% of Tether's $184 billion market cap. The agency warned that a decline in these assets could leave USDT undercollateralized, while also highlighting gaps in transparency around reserve management and counterparties according to the report.

Tether's financials, however, tell a different story. The company reported net profits exceeding $10 billion in the first nine months of 2025, with $174 billion in liabilities backed by $6.8 billion in excess reserves and $135 billion in U.S. Treasury holdings according to financial reports. CEO Ardoino emphasized Tether's role as the 17th-largest holder of U.S. debt, framing the firm as "the first overcapitalized firm in the financial industry" with no "toxic" assets in its portfolio according to CEO statements. The company also announced a share buyback program and applied for an investment fund license in El Salvador, where it is headquartered according to business news.

S&P's downgrade has reignited debates about stablecoin governance and transparency. While most USDT reserves remain in short-term Treasuries and cash equivalents, the agency criticized Tether for not segregating assets to protect against insolvency and for lacking a robust regulatory framework according to the analysis. Ardoino dismissed these concerns, arguing that the traditional financial system is "broken" and that Tether's success challenges outdated assumptions about capitalization and risk according to CEO comments. He further accused rating agencies of being complicit in steering investors toward "risk" while failing to adapt to crypto-era models according to the CEO's statement.

The controversy comes as global regulatory scrutiny of stablecoins intensifies.

Thailand is set to launch a pilot program allowing tourists to convert cryptocurrencies into baht via a regulated system, while Australia introduced a new bill to establish a framework for digital asset exchanges and tokenization custody platforms according to market reports. These developments underscore the growing integration of crypto into mainstream finance, even as debates over risk management and oversight persist.

Tether's ability to maintain its dollar peg remains central to its dominance in the stablecoin market. With Bitcoin and gold prices fluctuating amid broader market volatility, the company's strategy of diversifying reserves and expanding institutional partnerships may determine its long-term resilience according to financial analysis. For now, Ardoino's defiant stance-highlighting Tether's profitability and non-toxic asset base-positions the firm as a challenger to traditional finance's credibility, even as regulators and rating agencies push for greater transparency.