As global cryptocurrency markets focus heavily on the trustworthiness of stablecoins, a fierce confrontation between Web3 giants and traditional financial rating agencies has officially begun. On November 26, 2025, S&P Global Ratings downgraded Tether's USDT stablecoin's ability to maintain its peg to the US dollar to the lowest rating and warned that a decline in Bitcoin prices could lead to insufficient collateral for USDT. However, Tether CEO Paolo Ardoino fiercely countered this, stating, "We take pride in being hated by you," calling S&P's rating "traditional financial propaganda," and challenging them to use on-chain data rather than outdated models to assess USDT. This controversy not only reveals the cognitive gap between traditional finance and the digital asset world but also highlights how Tether, as a Web3 giant, confronts the old order with its unique strategy and impressive profitability, quietly becoming a significant player in the global gold market.
- S&P Downgrade: USDT Faces "Lowest Rating" and "Insufficient Collateral" Warning
On November 26, 2025, according to Bloomberg, S&P Global Ratings downgraded Tether's USDT stablecoin's ability to maintain its peg to the US dollar to the lowest rating and issued a warning.
Rating Downgrade: The rating agency's analysts lowered USDT's stability rating from "restricted" to "weak," which is the lowest level (5).
Core Concerns: S&P stated that this assessment "reflects an increase in high-risk asset exposure in USDT's reserves over the past year," including Bitcoin, gold, secured loans, and corporate bonds. At the same time, S&P also considered the limited disclosure of information by Tether and warned that a decline in Bitcoin prices could lead to the risk of insufficient collateral for the stablecoin.
- Tether's Strong Counterattack: Angrily Rebuts "Traditional Financial Propaganda," Emphasizes Strength and Transparency
After S&P Global Ratings downgraded USDT's stability rating to the lowest level, Tether launched a strong counterattack.
CEO's Angry Rebuttal: Tether CEO Paolo Ardoino dismissed the rating, calling it traditional financial propaganda, and posted, "We take pride in your hatred," while challenging S&P to use transparent on-chain data instead of outdated models to assess USDT.
Questioning Traditional Rating Systems: Paolo pointed out that traditional rating systems have long led investors to ultimately collapse "investment-grade" institutions, raising global regulatory concerns about the independence of rating agencies. He stated that the traditional financial system is unwilling to see any company escape its "failing gravity."
Emphasizing Strength and Performance: Tether claimed that the downgrade was erroneous, based on an outdated framework that ignored the stablecoin's past performance and actual application. Tether noted that even during crises, USDT has never experienced a redemption failure, and its daily trading volume on major exchanges and DeFi platforms still reaches billions of dollars. The company emphasized its $135 billion exposure to government bonds, placing it among the world's top government bond holders, and pointed out that profits exceeded $13 billion in 2024, with profits reaching $10 billion so far in 2025, demonstrating its strong capabilities.
Global Infrastructure Role: This also highlights USDT's global role as a financial infrastructure in emerging markets like Turkey and Nigeria, rather than merely a speculative token.
- Tether Quietly Becomes a "Gold Whale": Hoarding Gold Beyond Central Banks
In recent months, Tether has quietly surpassed all central banks to become one of the most aggressive gold buyers.
Rising Gold Prices: Gold prices surged a record 56% in 2025, typically attributed to concerns over fiscal dominance, rising public debt, loose monetary policy, and declining confidence in major currencies.
Central Banks Hoarding Gold: These concerns prompted central banks in countries like Kazakhstan, Brazil, and Turkey to increase their gold purchases, reinforcing gold's status as the world's most trusted safe-haven asset.
Tether's Astonishing Gold Hoard: However, a recent analysis by Jefferies revealed a surprising twist. Tether hoarded 26 tons of gold in the third quarter—more than any central bank. As of the end of September, the company's total gold holdings reached approximately 116 tons, valued at about $14 billion. Tether holds about 104 tons of USDT gold and 12 tons of XAUt gold. The scale and persistence of these purchases highlight its growing influence in the precious metals market.
Supporting USDT and XAUt: Tether's operations in the gold market extend far beyond its tokenized product XAUt. Jefferies reported that the company has been expanding its gold reserves to support the operations of USDT and XAUt. According to Reuters, the circulation of USDT grew from $174 billion in the third quarter to $184 billion by mid-November. As gold supply increases, its proportion in Tether's reserves is also growing. Currently, precious metals account for about 7% of Tether's reserves, valued at approximately $13 billion.
- Controversy Over Gold Hoarding: Conflict and Integration with the GENIUS Act
Tether's growing gold reserves have sparked new controversies, particularly in stark contrast to the newly enacted GENIUS Act in the United States.
Conflict with the Act: The GENIUS Act prohibits any compliant issuing institution from holding gold as part of its reserves and forces companies seeking approval to rely on cash, treasury bills, or other highly liquid and transparent assets. Tether has announced the launch of a token, USAT, that complies with GENIUS regulations and will not involve gold at all. However, even after the relevant law was passed, the company continued to increase USDT's gold reserves.
Integration of Gold and Cryptocurrency: Tether's commitment to physical gold highlights a deeper integration between cryptocurrencies and traditional safe-haven assets. The convergence of gold and Bitcoin (often referred to as "digital gold") is not entirely surprising. Both attract buyers concerned about the devaluation of major currencies. Many view limited-supply assets as a hedge against long-term currency devaluation.
- Risks of Safe Havens: Bitcoin Volatility and Stablecoin Fragility
Although gold and Bitcoin are seen as safe-haven tools, their operational mechanisms and risks are vastly different.
Bitcoin Volatility: Bitcoin has developed rapidly over the past decade, but its volatility remains high. Recent price fluctuations illustrate this point. Over the past two months, Bitcoin's price has significantly dropped, behaving more like a high-beta tech asset rather than a currency hedge tool.
Fragility of Stablecoins: Stablecoins provide instant equivalent exchanges and rely on reserves designed to maintain stability. However, the cryptocurrency industry remains susceptible to sudden pressures. Market sentiment can shift rapidly at any time. If demand for stablecoins plummets, the assets supporting these stablecoins will face direct pressure, including Tether's growing gold reserves. A sharp market reversal could trigger gold sell-offs, dragging this traditionally stable asset into the turmoil of the cryptocurrency market.
Conclusion:
Tether CEO Paolo Ardoino's strong rebuttal to S&P's downgrade, along with Tether's aggressive hoarding of hundreds of tons of gold, paints a picture of a Web3 giant confronting the old order of traditional finance. This not only reveals the significant gaps in cognition, regulation, and asset allocation between traditional finance and the digital asset world but also highlights Tether's firm determination as the world's largest stablecoin issuer to maintain USDT's stability and expand its global influence.
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Original article: “Tether: S&P Downgrade is ‘Traditional Financial Propaganda,’ USDT Aggressively Hoards Hundreds of Tons of Gold”
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