A wave of criticism and warnings about Tether’s present reserves have known as into query the soundness of USDT, the primary stablecoin pegged to the US greenback.
These criticisms have been exacerbated by S&P World’s current downgrade of the corporate’s credit standing. The ranking company identified the chance of USDT worth decline. however, Monetary knowledge from corporations behind stablecoins suggests strong means to face adversarial eventualitieseven because the cryptocurrency winter drags on.
S&P World’s current ranking modifications from 4 (Restricted) to five (Weak) point out an elevated perceived threat to the flexibility to keep up a greenback peg for digital belongings.
The evaluation justified the unfavorable revision, citing elevated publicity to “high-risk belongings” resembling Bitcoin (BTC) in USDT reserves over the previous 12 months, in addition to persistent gaps in disclosure.
Composition of USDT reserves
The audit on the finish of Q3 2025 will present perception into the present composition of USDT reserves. the information exhibits that Tether holds 80.3% of its reserves in US Treasuries, 7.1% in gold, and 5.4% in Bitcoin..
By October thirty first, a complete of $181.223 billion can be unfold throughout numerous belongings inside its reserves. Reserves symbolize the belongings backing the tokens in circulation, barely exceeding the worth of the issued tokens to keep up stability and canopy dangers. Nevertheless, presently, the circulating provide of USDT has already exceeded 184.58 billion USDT, and the entire provide is roughly 186.956 million USDT.
The corporate has established itself as one in all them. It’s now the world’s largest holder of U.S. debt, surpassing international locations resembling Germany. It holds a complete of $141 billion in Treasury-related belongings. This determine contains $112.417 billion positioned immediately in bonds and $27.457 billion positioned in repurchase contracts and cash market funds. These merchandise are nearly solely backed by authorities bonds.
Most U.S. bond collateral is taken into account low threat and extremely liquid.
Equally noteworthy is the rising diversification into belongings resembling gold. Tether holds $12.921 billion in treasured metals (primarily bodily gold) and $9.856 billion in Bitcoin, which collectively account for greater than 12% of the entire stablecoin backing. For critics, this half is extreme in a product that’s touted as “secure” and whose worth have to be mounted in {dollars} underneath all circumstances.
Actually, the nation’s gold reserves, with 116 tonnes of the dear metallic, rival these held by international locations resembling South Korea, Hungary and Greece, making it the world’s largest investor in gold outdoors of central banks, as reported by CriptoNoticias.
USDT Extra Capital and Arthur Hayes Criticism
Arthur Hayes, co-founder of BitMEX alternate, questions Tether’s monetary well being, Argues that diversification into gold and Bitcoin is a hedging technique that exposes you to falling costs.
Hayes warned {that a} hypothetical state of affairs may wipe out Tether’s capital and render USDT bancrupt if the mixed worth of gold and BTC falls by round 30%.
Nevertheless, Tether CEO Paolo Ardoino flatly rejected that evaluation, explaining that each Hayes and up to date criticisms (together with the S&P World downgrade) ignored necessary components of the corporate’s steadiness sheet.
In Ardoino’s personal phrases, as of the tip of the third quarter of 2025, the corporate had $7 billion in extra capital over its stablecoin reserves, and a further $23 billion in retained earnings, which is a part of Tether Group’s capital.
This cushion will not be mirrored within the audit, however The entire quantity of $30 billion belongs solely to the corporate. It’s also uncommitted as a 1:1 backup of the tokens in circulation, thus serving as a further layer of safety not thought of in adversarial eventualities raised by critics.
Nevertheless, the actual fact that they don’t seem within the audit raises reliable doubts as as to whether these funds actually exist within the declared measurement or might have already been pumped into different operations of the group. This opacity is likely one of the most recurring factors of skepticism about Tether.
Former Citi analyst Joseph Ayoub additionally defended Tether, however his argument strayed from the central problem. As an alternative of speaking about USDT help, he centered on the profitability of the enterprise. “Tether holds roughly $120 billion in interest-bearing authorities bonds (…), which equates to roughly $10 billion in internet earnings at nearly all prices (150 staff), making it probably the most environment friendly money turbines on the earth.”
Whereas it’s true that Tether is worthwhile, this level doesn’t handle the primary criticism of whether or not USDT reserves may be absolutely backed 1:1 in excessive stress eventualities. Mother or father firm profitability alone doesn’t assure quick redemption of tokens within the occasion of a giant run.
USDT resilience
From the information offered thus far, it may be inferred that the robustness and diversification of immediately’s USDT reserves, in addition to its big surplus capital, makes it doable to face a protracted crypto winter.
Analysts like Ted Pillows keep in mind that “Tether has been available on the market for 10 years and USDT remains to be $1.00.” He added that it operates on a fractional reserve mannequin much like conventional banks, however that stability can be maintained “so long as repayments are regular.”
Tether’s historical past contains moments of utmost market panic, such because the Luna/Terra crash in Might 2022. Slight lack of parity with the US greenback in just a few hours, nearly 2%reaching a low level round 0.98 per greenback. Nonetheless, digital belongings recovered in a brief time frame.
It is this resilience, Ayoub added, that has led analysts like him to level out that “Tether will not be bankrupt; fairly the alternative. They personal the cash printing presses.”
Whereas there are reliable causes for concern, together with S&P World’s downgrade, elevated publicity to unstable belongings resembling Bitcoin and gold, and continued opacity within the disclosure and precise existence of declared extra capital, the chance of USDT collapse stays low.
Subsequently, till there’s a large and simultaneous lack of confidence coupled with excessive declines within the costs of Bitcoin and gold, there isn’t any arduous proof that USDT will irreversibly depeg from the greenback within the brief or medium time period. We encourage continued vigilance, however present knowledge doesn’t warrant panic.
