Crypto: Tether accuses the S&P of sowing baseless doubt

The stability of the largest stablecoin on the market is in question. On November 29, the S&P agency downgraded USDT's ability to maintain its peg to the dollar. Tether, through its CEO Paolo Ardoino, denounces a biased analysis and defends its figures. This face-to-face meeting between a central player in crypto and a major financial institution rekindles the debate on the strength of reserves and confidence in the ecosystem.

S&P downgrades USDT, Tether hits back with its numbers

On November 29, S&P Global Ratings lowered the reliability rating of USDT, a stablecoin issued by Tether, to its lowest level.

The agency justifies this decision by Tether's exposure to assets considered too volatile, notably bitcoin and gold, to guarantee absolute stability against the dollar. This rating immediately reignited a wave of criticism and doubts about the solidity of the Tether model, already closely scrutinized by authorities and market players.

The response from Tether CEO Paolo Ardoino was swift and scathing. He strongly rejects the S&P's findings, saying the agency's analysis leaves out critical elements.

” THE S&P made the same mistake by not taking into account the group's additional equity capital, nor the approximately $500 million in monthly profits generated solely by US Treasury yields. “, he said.

He believes that the rating is based on an incomplete vision of the consolidated accounts of the Tether group. Here are the main figures put forward by Paolo Ardoino, based on the report certificate for the third quarter of this year:

• Tether Group's total assets: approximately $215 billion;

• Liabilities linked to stablecoins: approximately $184.5 billion;

• Excess equity: approximately $7 billion;

• Retained profits included in equity: approximately $23 billion;

• Recurring monthly profits linked to US Treasury bonds: approximately $500 million.

According to Ardoino, these figures show that Tether is largely overcollateralized, and that the methodology used by the S&P does not accurately reflect the consolidated financial reality of the group, in particular its internal revenues and its operational structure.

Analysts divided: should we be worried about Tether's strategy?

Beyond the quarrel between Tether and S&P, this situation has awakened a strategic debate among sector analysts on the investment choices of the stablecoin issuer.

Arthur Hayes, founder of the BitMEX platform, has expressed concerns about the gold and bitcoin reserves held by Tether. According to him, these volatile assets could pose a risk in the event of a market downturn.

“ A ~30% drop in gold and BTC position would wipe out their equity, making USDT, in theory, insolvent“, he warned. Hayes speculates that the purchase of these assets serves to offset an anticipated decline in Treasury-related revenues in anticipation of monetary easing by the U.S. Federal Reserve.

However, this reading is far from unanimous. Joseph Ayoub, a former senior crypto analyst at Citi, dismissed Hayes' projections. He claims to have spent“hundreds of hours analyzing Tether”when he worked at Citi, and defends a very different position.

For him, Tether has assets beyond what it publicly declares, operates an extremely profitable business thanks to interest on Treasury bills, while operating with a lean structure of only 150 employees. He goes so far as to assert that Tether is “better collateralized than traditional banks», and that its critics largely underestimate the solidity of the model.

Tether is targeting a valuation of $500 billion. However, the controversy with the S&P highlights the tensions between ambition and transparency. Between institutional distrust and meteoric growth, the future of the stablecoin will depend as much on its financial solidity as on its ability to convince beyond its adoption target.