Paolo Ardoino, the CEO of Tether (CRYPTO: USDT), questioned on Wednesday the methodologies adopted by traditional rating agencies after the S&P downgraded the stablecoin issuer’s stability rating.
Tether CEO Challenges TradFi Ratings
Ardoino slammed S&P Global Ratings in an X post, saying that the company wears the “loathing” with pride.
Ardoino criticized the “classical rating models,” alleging that they have led investors to put money in companies that eventually collapsed despite receiving investment-grade ratings.
“The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system,” the CEO said.
See Also: South Korea’s Stablecoin War Heats Up As Tech Giants Race To Challenge Dollar Dominance
Ardoino Says Tether Is Overcollateralized
Ardoino also claimed that Tether is the “first overcapitalized company” in the financial industry and remains “extremely profitable.”
The S&P Global Ratings didn’t immediately return Benzinga’s request for comment.
Why Did S&P Downgrade Tether?
Ardoino’s remark comes after S&P downgraded Tether’s ability to maintain its peg with the dollar from “Constrained” to the lowest tier, “Weak,” citing a higher allocation to “high-risk” reserve assets, including Bitcoin (CRYPTO: BTC) and Gold.
The rating agency noted that Bitcoin represents 5.6% of USDT’s circulating supply and warned that a drop in high-risk assets could leave reserves insufficient for collateral coverage.
Tether’s Credentials
Tether relocated its operations to El Salvador earlier this year, a move prompted by the country's cryptocurrency-friendly policies and adoption of digital assets.
Ardoino had stated earlier this year that Tether had no plans to go for a Wall Street listing, citing the company’s profitability and conservative management as key reasons
Tether’s latest attestation report shows $181 billion in reserves backing its tokens. It is also the 17th largest holder of U.S. sovereign debt, with $135 billion in treasuries
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
