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flag S&P downgrades Tether’s USDT to '5 (weak)' over risky reserves and transparency issues, despite Tether’s claim of stability and sufficient backing.

flag S&P Global downgraded Tether’s USDT stablecoin to a '5 (weak)' rating, the lowest possible, citing increased exposure to high-risk assets like Bitcoin, gold, and corporate bonds, along with poor transparency in reserve disclosures. flag The move follows a rise in USDT’s circulating supply to $184.4 billion and concerns over its ability to maintain its dollar peg amid market volatility, especially as Bitcoin now makes up 5.6% of reserves—exceeding its overcollateralization threshold. flag Tether disputes the assessment, asserting its reserves are sufficient and that USDT has maintained stability and processed billions in redemptions without interruption.

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