TechFlow news, November 26 — According to The Block, S&P Global Ratings has downgraded Tether's USDT stability assessment to level 5, the weakest level on its scale, due to increasing risk components in its reserve assets. According to the S&P report, Bitcoin now accounts for approximately 5.6% of USDT's circulating supply, exceeding the 3.9% reserve buffer implied in Tether's latest third-quarter attestation, meaning a significant drop in Bitcoin's price could lead to undercollateralization of USDT.
As of September 30, Tether's high-risk assets—including Bitcoin, gold, secured loans, and corporate bonds—accounted for 24% of its reserves, up from 17% a year earlier. S&P noted that these risk exposures, combined with ongoing issues regarding reserve transparency, were the primary reasons for the downgrade.
