A wave of criticism and warnings about Tether’s present reserves has referred to as into query the soundness of USDT, the principle stablecoin pegged to the US greenback.
These criticisms are fueled by a current downgrade of its credit standing by S&P World. The score company identified a threat of USDT value decline. However, Monetary information from the corporate behind the stablecoin suggests a strong skill to face antagonistic situationseven extended crypto winters.
S&P World’s current rerating concerned a transfer from 4 (restricted) to five (weak), signaling a rise in perceived threat to the digital asset’s skill to take care of its peg to the greenback.
The evaluation justified the unfavourable revision by citing elevated publicity to “high-risk belongings,” equivalent to bitcoin (BTC), in USDT reserves over the previous yr, and chronic gaps in data disclosure.
Composition of USDT reserves
The audit on the finish of Q3 2025 gives perception into the composition of present USDT reserves. The info reveals that Tether holds 80.3% of its reserves in US Treasury bonds, 7.1% in gold and 5.4% in bitcoin.
With a complete of 181,223 million {dollars} distributed in numerous belongings inside its reserve, till October 31. Reserves symbolize the belongings backing the tokens in circulation, and barely exceed the worth of the issued tokens to take care of stability and canopy dangers. Nevertheless, at present the circulating provide of USDT is already over 184.58 billion USDT and the overall provide is round 186.956 million USDT.
The corporate has established itself as one of many largest international holders of US debt, surpassing international locations like Germany. Its complete holdings quantity to $141 billion in Treasury-related belongings. This determine is made up of $112,417 million instantly in bonds and $27,457 million are positioned in repurchase agreements and cash market funds. These devices are nearly completely backed by Treasury bonds.
This majority of the collateral in US debt devices is taken into account low threat and excessive liquidity.
Likewise, the rising diversification in direction of belongings equivalent to gold is notable. Tether has 12,921 million {dollars} in treasured metals (primarily bodily gold) and $9.856 billion in bitcoin, which collectively symbolize greater than 12% of the stablecoin’s complete backing. For critics, this portion is extreme in a product that’s marketed as “secure” and whose worth should stay anchored to the greenback below any circumstances.
In actual fact, with 116 tons of the valuable steel, its gold reserve is the same as these held by states equivalent to Korea, Hungary and Greece, positioning itself because the investor with probably the most gold on this planet, exterior of central banks, as reported by CriptoNoticias.
USDT Extra Capital and Arthur Hayes’ Criticism
Arthur Hayes, co-founder of the BitMEX trade, questioned the monetary soundness of Tether, arguing that diversification into gold and bitcoin is a hedging technique that exposes them to a value drop.
Hayes warned {that a} roughly 30% drop within the mixed worth of gold and BTC might, in a hypothetical situation, wipe out Tether’s capital, rendering USDT bancrupt.
Nevertheless, Paolo Ardoino, CEO of Tether, flatly rejected that evaluation and defined that each Hayes and up to date criticism (together with the downgrade of S&P World) are ignoring a vital a part of the corporate’s stability sheet. In Ardoino’s personal phrases, on the finish of the third quarter of 2025 the corporate had $7 billion in extra capital above the stablecoin reserves and, moreover, one other $23 billion in retained earnings which are a part of the capital of the Tether Group.
This cushion, which isn’t mirrored within the audit, It’s a complete of 30,000 million {dollars} that belongs completely to the corporate and isn’t dedicated as a 1:1 backup of the tokens in circulation, so it acts as an additional layer of safety that’s not being taken under consideration within the antagonistic situations raised by critics.
Nevertheless, exactly by not showing within the audits, a reputable doubt arises as as to if these funds actually exist within the declared magnitude or whether or not they might already be dedicated to different operations of the group. This opacity is likely one of the factors that the majority fuels the recurring skepticism in direction of Tether.
Joseph Ayoub, a former Citi analyst, additionally defended Tether, however his argument strayed from the central problem. As a substitute of speaking in regards to the help of USDT, he targeted on the profitability of the enterprise. “Tether has roughly $120 billion in interest-bearing Treasury bonds (…) that represents roughly $10 billion in internet revenue with little value (150 staff), making it one of the crucial environment friendly cash-generating firms on this planet.”
Whereas it’s true that Tether is worthwhile, this level doesn’t handle the principle criticism of whether or not or not USDT reserves are totally backed 1:1 in an excessive stress situation. The profitability of the dad or mum firm doesn’t alone assure on the spot redemption of the tokens if an enormous run happens.
The resilience of USDT
The info introduced thus far permits us to deduce that the robustness and diversification of USDT reserves at the moment, along with its monumental cushion of surplus capital, permit it to face extended crypto winters.
Analysts like Ted Pillows do not forget that “Tether has been available on the market for a decade and USDT continues to be at $1.00.” He added that whereas they function with a fractional reserve mannequin just like that of conventional banks, stability is maintained “so long as repayments stay regular.”
Tether’s historical past consists of going via moments of maximum market panic, equivalent to the autumn of Luna/Terra in Could 2022. By the tip of that yr, even, barely misplaced parity with the US greenback for a number of hours, nearly 2%reaching its lowest level round 0.98 per greenback. Regardless of this, the digital asset recovered in a short while.
This resilience is what has led analysts like Ayoub to level out that “Tether will not be turning into bancrupt, fairly the other: they’ve a cash printing machine,” Ayoub provides.
There are reputable causes for concern — S&P World’s downgrade, rising publicity to unstable belongings like bitcoin and gold, and continued opacity within the disclosure and precise existence of declared extra capital — however the threat of a USDT collapse stays low.
Subsequently, till there’s a huge and simultaneous lack of confidence mixed with an excessive drop in bitcoin and gold costs, there isn’t a stable proof that USDT will break its peg with the greenback irreversibly within the quick or medium time period. Vigilance stays advisable, however panic will not be justified with present information.
