S&P Global Ratings has assigned the stablecoin USDT its lowest stability rating, citing reliance on volatile assets and limited audit coverage.

Rating rationale

According to S&P Global Ratings, the peg of USDT to the dollar depends in part on holdings of assets the agency classifies as volatile, increasing fragility under stress scenarios.

The report also highlights what it calls an insufficient volume of independent attestations and limited transparency around the composition and liquidity of reserve assets.

Regulatory and verification concerns

S&P Global further pointed to comparatively soft regulatory oversight of Tether in El Salvador and noted an absence of regular, mandated checks that could otherwise enhance confidence in reported reserves.

The agency framed these factors as reducing the predictability of redemption outcomes during market disruptions and complicating external assessments of reserve adequacy.

Tether response

Tether rejected the conclusions of S&P Global Ratings, stating the assessment does not reflect the stablecoin’s actual resilience in operation and liquidity provision.

The company emphasized that its reserves include significant holdings of government bonds and gold, and said these positions support USDT amid growth in the stablecoin sector.