A wave of criticism and warnings about Tether’s present reserves have known as into query the steadiness of USDT, the primary stablecoin pegged to the US greenback.
These criticisms have been exacerbated by S&P International’s current downgrade of the corporate’s credit standing. The score company identified the chance of USDT worth decline. however, Monetary knowledge from corporations behind stablecoins suggests stable means to face antagonistic eventualitieseven because the cryptocurrency winter drags on.
S&P International’s current score modifications from 4 (Restricted) to five (Weak) point out an elevated perceived danger to the power to take care of a greenback peg for digital belongings.
The evaluation justified the unfavourable revision, citing elevated publicity to “high-risk belongings” comparable to 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 will likely be unfold throughout varied belongings inside its reserves. Reserves symbolize the belongings backing the tokens in circulation, barely exceeding the worth of the issued tokens to take care of stability and canopy dangers. Nonetheless, at the moment, the circulating provide of USDT has already exceeded 184.58 billion USDT, and the full provide is roughly 186.956 million USDT.
The corporate has established itself as one in every of them. It’s now the world’s largest holder of U.S. debt, surpassing nations comparable to Germany. It holds a complete of $141 billion in Treasury-related belongings. This determine consists of $112.417 billion positioned instantly in bonds and $27.457 billion positioned in repurchase contracts and cash market funds. These merchandise are virtually solely backed by authorities bonds.
Most U.S. bond collateral is taken into account low danger and extremely liquid.
Equally noteworthy is the rising diversification into belongings comparable to 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 full stablecoin backing. For critics, this half is extreme in a product that’s touted as “steady” and whose worth have to be fastened in {dollars} beneath all circumstances.
In actual fact, the nation’s gold reserves, with 116 tonnes of the valuable metallic, rival these held by nations comparable to South Korea, Hungary and Greece, making it the world’s largest investor in gold outdoors of central banks, as reported by CriptoNoticias.
USDT Further Capital and Arthur Hayes Criticism
Arthur Hayes, co-founder of BitMEX change, 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 situation might wipe out Tether’s capital and render USDT bancrupt if the mixed worth of gold and BTC falls by round 30%.
Nonetheless, Tether CEO Paolo Ardoino flatly rejected that evaluation, explaining that each Hayes and up to date criticisms (together with the S&P International downgrade) ignored essential components of the corporate’s stability 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 isn’t mirrored within the audit, however The full 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 antagonistic eventualities raised by critics.
Nonetheless, the actual fact that they don’t seem within the audit raises reliable doubts as as to if these funds actually exist within the declared dimension or could 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 revenue at virtually all prices (150 workers), making it one of the crucial environment friendly money turbines on the earth.”
Whereas it’s true that Tether is worthwhile, this level doesn’t deal with the primary criticism of whether or not USDT reserves might be absolutely backed 1:1 in excessive stress eventualities. Dad or mum firm profitability alone doesn’t assure fast redemption of tokens within the occasion of a giant run.
USDT resilience
From the information offered to this point, it may be inferred that the robustness and diversification of as we speak’s USDT reserves, in addition to its enormous surplus capital, makes it attainable to face a chronic crypto winter.
Analysts like Ted Pillows do not forget that “Tether has been in the marketplace for 10 years and USDT continues to be $1.00.” He added that it operates on a fractional reserve mannequin much like conventional banks, however that stability will likely be maintained “so long as repayments are regular.”
Tether’s historical past consists of moments of utmost market panic, such because the Luna/Terra crash in Could 2022. Slight lack of parity with the US greenback in a number of hours, virtually 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 isn’t bankrupt; fairly the other. They personal the cash printing presses.”
Whereas there are reliable causes for concern, together with S&P International’s downgrade, elevated publicity to risky belongings comparable to Bitcoin and gold, and continued opacity within the disclosure and precise existence of declared extra capital, the chance of USDT collapse stays low.
Due to this fact, 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 quick or medium time period. We encourage continued vigilance, however present knowledge doesn’t warrant panic.
