S&P | Cuts Tether Stablecoin Rating | Users React Strongly
Edited By
Sofia Martinez
Tether Faces Backlash Over Rating
On November 27, 2025, S&P downgraded Tether's stablecoin, USDT, from a โ4 (constrained)โ to a โ5 (weak)โโthe lowest ranking possible. This decision has sparked heated debate among forums and people discussing the implications of the downgrade and the stability of Tether in the crypto market.
Tether's Response
Tether quickly responded, stating it "strongly disagrees with the characterization presented in the report". Users voiced skepticism over Tether's operations, with one comment noting, "Everyone knows they are printing hundreds of billion of counterfeit dollars, and still the fraud is going unabated."
Public Sentiment: Outrage and Skepticism
The downgrade has fueled fears about Tether's transparency and influence. Commenters pointed out the systemic risks tied to Tether's operations, claiming its practices could potentially destabilize the entire crypto sector. One commentator remarked, "Whatโs interesting is that even if one stable coin is considered more reliable than Tether, tether can destabilize that by doing massive swaps of their garbage coins for the other coins that are actually backed."
Social media users reacted with a mixture of surprise and outrage, stating:
"Damn that's 100% corporate finance speak for 'This shit is fraudulent as hell'."
Key Themes Emerging from the Discussion
Transparency and Trust: Critics emphasize significant disclosure gaps in Tetherโs operations.
Systemic Risk: Concerns over Tether's influence in the broader crypto market grow louder as users fear a potential collapse.
Criticism of Regulatory Standards: Many question the legitimacy of S&P's rating and express disbelief that Tether wasnโt rated lower before.
Key Takeaways
๐บ Tether is now rated โ5 (weak)โ according to S&P.
โก Users highlight major disclosure gaps and systemic risks.
๐ฃ๏ธ "Ultimately this doesnโt matter at all. I mean, where else is crypto going to turn for liquidity?"
Epilogue
S&P's downgrade of Tether raises red flags in the crypto community. The ongoing conversations reflect a deep-seated anxiety over the reliability of stablecoins and the future of digital currencies. As debates continue, many are left wondering: can trust in Tether be restored?
Future Implications for Tether
There's a strong likelihood that Tether will face mounting pressure to enhance its transparency and operational practices. With experts estimating around a 70% chance of increased regulatory scrutiny, the stablecoin's future hangs in the balance. If fears about systemic risks continue to rise, Tether might cut ties with certain partnerships or enact stricter compliance measures to restore faith. Additionally, many forums suggest that if confidence wanes further, alternative stablecoins could capture significant market share, leading to Tether's potential decline. The operative theme will center on how well Tether can pivot amidst this turbulent environment, with chances of a more structured governance model rising to about 50% in the coming months.
A Historical Echo from the Financial Crisis
In the world of finance, the downfall of major mortgage-backed securities firms in 2008 serves as a striking analogy to Tether's current challenges. Just like those firms, which initially appeared to hold steady value yet were fundamentally unstable, Tether now confronts a critical moment where its perceived reliability is deeply at risk. Both scenarios involve a collection of trust factors that, once broken, lead to accelerated fallout; it took surprising domino effects to reveal the truth then, akin to the skepticism swirling around Tether today. As history teaches, the path forward can shift rapidly when trust is undermined, prompting significant shifts in the market ecosystem.