Tether's stablecoin downgraded to 'weak' in S&P assessment
By Elizabeth Howcroft S&P Global has downgraded its rating of the world's largest stablecoin, Tether, citing an increase in higher-risk assets in the cryptocurrency's reserves and "persistent gaps in disclosure", the ratings agency said on Wednesday.S&P in 2023 created a new scale from 1 to 5, to assess the risk of various stablecoins - a type of cryptocurrency pegged to mainstream currencies, usually the U.S. dollar. In a research note S&P said it now rated Tether's token, known as USDT, as "5 (weak)", which is the lowest possible score, downgrading it from "4 (constrained)".A spokesperson for Tether did not immediately respond to a request for comment. Tether has previously said its token is the "leading digital dollar, combining stability, transparency, and global accessibility." El Salvador-based Tether says it has issued around $184 billion worth of its dollar-pegged cryptocurrency, and says it holds enough reserves in U.S. Treasuries and other assets to allow token-holders to swap their Tether tokens back for dollars.S&P said there had been an increase in high-risk assets in Tether's reserves over the past year, including bitcoin, gold, secured loans, corporate bonds and other investments, "all with limited disclosures and subject to credit, market, interest-rate, and foreign-exchange risks.""Tether continues to provide limited information on the creditworthiness of its custodians, counterparties, or bank account providers," S&P added.Still, Tether has maintained "a notable level of price stability" even during periods of crypto market volatility, S&P's note said.