S&P downgrades USDT to lowest stability category

S&P Global Ratings has downgraded its stability assessment for Tether's USDT stablecoin to a score of 5, the lowest category in its framework, The Block reported. The agency determined that USDT no longer possesses a sufficient buffer to absorb a potential decline in Bitcoin's value. S&P also pointed to unresolved issues with Tether's public disclosures and reserve governance, noting that details regarding its custodians and asset composition remain unclear. The proportion of high-risk assets in Tether's reserves—including Bitcoin, gold, secured loans, corporate bonds, and other investments with limited public information—increased from 17% last year to 24% as of Sept. 30, S&P added. However, the ratings agency noted that the stability assessment could improve if Tether reduces its high-risk asset exposure and provides more complete information on its reserve composition and the creditworthiness of its banking and custodial partners.