Risk rating agency Standard & Poor’s (Standard & Poor’s) Lowered the risk rating of stablecoin issuer assets pregnancy From “restricted” to “weak”. In response, the company’s CEO said: Paolo ArduinoThe actions of these devices were generally criticized on social media.
As the Financial Times reported, Standard & Poor’s noted “an increase in high-risk assets” backing the USDT stablecoin, the most widely used in the world.
Stablecoins are cryptocurrencies whose price is linked to the price of a traditional currency, such as the dollar, at a parity rate of 1:1. This parity is achieved by keeping reserves in the reference currency at the same value as the total tokens issued. These reserves generally consist of assets equivalent to money itself, such as highly safe government bonds.
USDT is currently the largest stablecoin and the third largest cryptocurrency by market cap in the world, with a capitalization of US$184.3 billion.
According to Standard & Poor’s, Corporate bonds, Precious metals, Bitcoin (BTC) and Secured loans It represented 24% of Tether’s total reserves at the end of September, up from 17% a year earlier.
“A decline in the price of Bitcoin or the value of other riskier assets could reduce collateral coverage and result in USDT becoming uncollateralized,” S&P analysts wrote. The agency also accused Tether of having “limited transparency” about its reserves.
After the report was released, Ardoino, who heads Tether, published a post on Twitter criticizing the performance of risk agencies.
“Classical rating models designed for traditional financial institutions have historically led private and institutional investors to invest money in companies that have failed, despite having ‘investment grade’ ratings, leading regulators around the world to question these models, and the independence and independent analysis of all major rating agencies,” Ardoino said.
The criticism, although not specific, addresses the actions of these agencies during the 2008 financial crisis, when many converted real estate assets of questionable quality obtained so-called “investment grade.”
Ardoino also wrote that the “traditional financial hype machine” becomes anxious when any company tries to “challenge the gravity of the collapsing financial system.” He said Tether is overcapitalized and does not have “toxic reserves.”.