Tether CEO Paolo Ardoino responded to S&P classifying USDT as "junk grade": Smear campaigns are our proudest badge of honor.

S&P has downgraded USDT to “lowest tier,” with Tether officials emphasizing that existing cash flows can easily fill the risk gap, while CEO Paolo Ardoino responded, “Your disdain is our badge of honor.” (Background: Tether announces investment in digital asset infrastructure platform Parfin: Accelerating USDT adoption in Latin America) (Context: Tether's golden empire: Tether's ambition and fractures as a “stateless central bank”) On November 26, S&P Global Ratings suddenly downgraded the stability score of the stablecoin Tether, with a market capitalization of approximately $184 billion, to the lowest level 5. The report pointed out that the high proportion of Bitcoin, gold, and corporate bonds in USDT reserves impacts buffer capital adequacy. Hours later, Tether countered through a statement and public remarks from CEO Paolo Ardoino, stating that the S&P model is “disconnected from reality.” Paolo Ardoino's X post translation is as follows: To S&P regarding your Tether rating: We wear your loathing with pride. The classical rating models built for legacy financial institutions have repeatedly led private and institutional investors into “investment grade” companies, only for them to later collapse, forcing global regulators to question these models and the independence and objectivity of major rating agencies. As long as there are companies trying to counter the “gravity” of this broken financial system, the propaganda machine of traditional finance will become anxious. The message is clear: no one should dare to depeg. Tether has chosen another path. We have built the first company in the financial industry with “excess capital adequacy,” without toxic reserve assets, while still being highly profitable. Tether's results reveal a disturbing fact: the traditional system has failed so badly that it has begun to fear those who expose “the emperor's new clothes.” To S&P regarding your Tether rating: We wear your loathing with pride. The classical rating models built for legacy financial institutions, historically led private and institutional investors to invest their wealth into companies that despite being attributed investment grade… — Paolo Ardoino (@paoloardoino) November 26, 2025 Rating downgrade triggers confidence test According to S&P Global Ratings' assessment, high volatility assets account for 24% of USDT reserves, exceeding common levels for traditional stablecoins. The valuation of the Bitcoin position alone is approximately $9.9 billion, accounting for 5.6% of the total. Meanwhile, after deducting liabilities, the available “excess buffer” is only $6.78 billion, accounting for 3.9%. S&P pointed out that if Bitcoin were to repeat its 50% slump from 2022, the buffer capital would not fully cover the losses, putting pressure on the 1:1 redemption promise. Tether officials: dynamic cash flows can fill the gap In the face of insolvency concerns, Tether has taken proactive defense, emphasizing that the company is not a traditional bank but a machine capable of generating massive cash flows in a short time. According to the 2025 Q1-Q3 audit report, Tether's profits have exceeded $10 billion, and its holdings of U.S. Treasury securities exceed $135 billion. Management believes that if market fluctuations lead to paper losses, quarterly earnings can be replenished in a very short time, and S&P's static model overlooks this “dynamic restoration” capability. Market prices indifferent to rating downgrade Following the downgrade news, USDT remained at $1 on major exchanges, with no large-scale depeg or redemptions. Traders pointed out that the Trump administration's relatively lax approach to cryptocurrencies, coupled with Tether's long-term substantial holdings of U.S. Treasury bonds, has enhanced investor confidence in its dollar liquidity. An over-the-counter market maker candidly stated that the market is “willing to pay for a 1.7% risk gap,” as Tether's daily interest income far exceeds potential volatility losses. More importantly, Tether currently holds $135 billion in U.S. Treasury securities, making it the 17th largest holder of U.S. debt globally, surpassing South Korea and approaching Brazil's holdings. Additionally, Tether is the largest independent holder of gold aside from central banks, without a continuously expanding budget deficit. Related reports The gold market welcomes a new era of encryption! Stablecoin giant Tether poaches two top precious metal traders from HSBC Tether buys the dip on Bitcoin for nearly $100 million, accumulating holdings of 87296 BTC, firmly securing its position as the sixth largest holder entity. This article was first published in BlockTempo's “Dynamic Trends - The Most Influential Blockchain News Media.”