S&P vs Tether: The Hottest Clash in the Crypto Industry This Year

Source: TokocryptoBlog Original Title: S&P vs Tether: The Hottest Clash in the Crypto Industry This Year Original Link: In a heated drama between the crypto world and traditional financial institutions, S&P Global Ratings officially downgraded Tether (USDT) to the lowest level, sparking a war of words with its CEO, Paolo Ardoino. This clash opens an ever-deepening chasm between digital innovators and old financial gatekeepers.

S&P Downgrades Tether to “Weak” Rating: Lowest Rating on Their Scale

On November 26, S&P Global Ratings downgraded Tether to “5 (weak)”, the lowest level in the stablecoin risk scale they launched in 2023.

S&P alleges the existence of:

• Transparency gap
• A high portion of risky assets in reserves, such as Bitcoin, gold, corporate bonds, secured loans, and other assets
• The lack of information regarding credit and market risks from custodians or Tether partners.

However, at the same time, S&P acknowledges that USDT has proven to be stable, even when the crypto market experiences turbulence.

Tether CEO Fights Back: “We Are Proud to Be Hated!”

Shortly after the report was released, Tether CEO Paolo Ardoino fired back with a strong response. He wrote:

“We wear your loathing with pride.”

Ardoino criticized the traditional rating model which he believes:

• Failed to assess large financial institutions that subsequently collapsed
• Not relevant for digital asset companies working with different reserve dynamics
• Trapped in an old way of thinking that cannot keep up with innovation

Ardoino emphasized that Tether is actually healthier than many financial institutions that have been given high ratings by agencies like S&P.

Tether: “We Are Stronger Than Traditional Banks”

Tether outright rejected the S&P assessment.

The company claims:

• Has issued USDT worth approximately $184 billion
• Always able to fulfill the exchange (redemption)
• Successfully survived the banking crisis, stock market collapse, and cryptocurrency market turmoil

Separate reports also mention that Tether is now the largest independent gold holder in the world, showcasing an increasingly aggressive reserve diversification strategy.

The Great Battle: Crypto vs Traditional Finance

This tension underscores the big question that continues to haunt the modern financial world.

Who has the right to determine risk standards in the digital era?

Are traditional rating agencies still relevant for assessing stablecoins, or should they be the ones to adapt?

With stablecoins like Tether playing an increasingly important role in the global market, this clash seems to have just begun.

Conclusion

The downgrade of the S&P rating is not just a number, but a symbol of a major clash between two financial paradigms.

S&P remains committed to the old standards.

Tether positions itself as a challenger to the financial system that is considered outdated.

For now, the crypto world is waiting for the next chapter of this major drama.