The post S&P Global Downgrades USDt Stability Rating to Lowest Score Possible appeared on BitcoinEthereumNews.com. S&P Global Ratings has downgraded Tether’s USDt to the lowest score on its stablecoin stability scale, questioning the token’s ability to maintain its dollar peg. The “weak” assessment was due to several factors, including Tether backing USDt (USDT) with “higher-risk” assets such as Bitcoin (BTC), gold, loans and corporate bonds that are subject to higher volatility, according to S&P Global. The report read: “Bitcoin represents 5.6% of USDT in circulation, exceeding the 3.9% overcollateralization margin associated with a collateralization ratio of 103.9%. A decline in the price of bitcoin or the value of other higher-risk assets could therefore reduce collateral coverage.” A breakdown of the reserve assets backing the USDt stablecoin. Source: S&P Global Ratings Tether is headquartered in El Salvador and is regulated according to the National Commission of Digital Assets (CNAD), which has looser requirements for reserve assets backing stablecoins, S&P said. A lack of sufficient audits or proof-of-reserve reports was also cited as a core driver of the weak stability rating. Despite the weak rating, S&P said 75% of USDt’s backing comes from US Treasurys and other short-term financial instruments that are “low risk.”  In a statement to Cointelegraph, Tether classified the report as “misleading,” saying that it “strongly disagrees with the characterization presented in the report,” and that it “fails to capture the nature, scale, and macroeconomic importance of digitally native money and overlooks data that clearly demonstrate USDT’s resilience, transparency, and global utility.” Tether CEO Paolo Ardoino also pushed back against the new rating and the utility of financial ratings agencies in general.  “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 ratings, collapsed,” Ardoino said. Source: Paolo Ardoino The report came amid a landmark year for… The post S&P Global Downgrades USDt Stability Rating to Lowest Score Possible appeared on BitcoinEthereumNews.com. S&P Global Ratings has downgraded Tether’s USDt to the lowest score on its stablecoin stability scale, questioning the token’s ability to maintain its dollar peg. The “weak” assessment was due to several factors, including Tether backing USDt (USDT) with “higher-risk” assets such as Bitcoin (BTC), gold, loans and corporate bonds that are subject to higher volatility, according to S&P Global. The report read: “Bitcoin represents 5.6% of USDT in circulation, exceeding the 3.9% overcollateralization margin associated with a collateralization ratio of 103.9%. A decline in the price of bitcoin or the value of other higher-risk assets could therefore reduce collateral coverage.” A breakdown of the reserve assets backing the USDt stablecoin. Source: S&P Global Ratings Tether is headquartered in El Salvador and is regulated according to the National Commission of Digital Assets (CNAD), which has looser requirements for reserve assets backing stablecoins, S&P said. A lack of sufficient audits or proof-of-reserve reports was also cited as a core driver of the weak stability rating. Despite the weak rating, S&P said 75% of USDt’s backing comes from US Treasurys and other short-term financial instruments that are “low risk.”  In a statement to Cointelegraph, Tether classified the report as “misleading,” saying that it “strongly disagrees with the characterization presented in the report,” and that it “fails to capture the nature, scale, and macroeconomic importance of digitally native money and overlooks data that clearly demonstrate USDT’s resilience, transparency, and global utility.” Tether CEO Paolo Ardoino also pushed back against the new rating and the utility of financial ratings agencies in general.  “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 ratings, collapsed,” Ardoino said. Source: Paolo Ardoino The report came amid a landmark year for…