S&P downgraded Tether to the lowest risk level, raising doubts about USDT's stability and the impact on Juventus' shareholder base.
Standard & Poor's rating agency has shaken up the world of cryptocurrency, and indirectly that of football, by downgrading Tether's (USDT) stability rating to level 5, described as 'weak' - the lowest rung on the ladder.
The news raises questions not only about the future of the world's most capitalised stablecoin, but also about the position of a key player in the shareholder structure of a major Italian sports club.
A giant under scrutiny
Tether is the issuer of the digital cryptocurrency USDT, a stablecoin that, by its very nature, should always maintain a value pegged exactly to one US dollar. To ensure this parity, the company must hold equivalent reserves in cash or other assets. However, S&P's ratings point the finger precisely at the composition of these collateral.
According to reports in Football and Finance, the agency expressed concern that Tether's reserves are increasingly made up of high-risk investments at the expense of 'safe dollars'.
The Danger of Volatile Assets
S&P's assessment is based on data showing significant exposure to volatile instruments. Almost a quarter (24%) of Tether's collateral is invested in assets such as Bitcoin, gold and loans. In particular, it is the share of Bitcoin that has seen significant growth, increasing the company's overall risk profile.
The fear expressed by S&P is simple, but fundamental to the stablecoin market: if the value of Bitcoin or other investments were to suddenly collapse, Tether might not have sufficient safe funds to cover the huge value of its currency in circulation.
Although Tether is a behemoth with a market value in excess of $180 billion and has shown remarkable resilience to date, the agency is issuing a clear warning.
The Impact on the World of Football
The S&P decision also has a particular resonance in the sporting scene: Tether is the second largest shareholder in the Juventus, holding a significant 11.7% stake in the Juventus club.
The downgrade sends an 'important message' to the company, demanding greater security, reduced risk and greater clarity in order to aspire to an improved rating in the future. A request that also takes on specific weight considering the key role Tether plays in the Old Lady's shareholder base.
Tether invests EUR 30 million in Bit2Me, the first Spanish-language exchange with a MiCA licence. The deal aims to expand its presence in Europe and Latin America, with a focus on Argentina, bypassing EU regulatory barriers.
Standard & Poor's rating agency has shaken up the world of cryptocurrency, and indirectly that of football, by downgrading Tether's (USDT) stability rating to level 5, described as 'weak' - the lowest rung on the ladder.
The news raises questions not only about the future of the world's most capitalised stablecoin, but also about the position of a key player in the shareholder structure of a major Italian sports club.
A giant under scrutiny
Tether is the issuer of the digital cryptocurrency USDT, a stablecoin that, by its very nature, should always maintain a value pegged exactly to one US dollar. To ensure this parity, the company must hold equivalent reserves in cash or other assets. However, S&P's ratings point the finger precisely at the composition of these collateral.
According to reports in Football and Finance, the agency expressed concern that Tether's reserves are increasingly made up of high-risk investments at the expense of 'safe dollars'.
The Danger of Volatile Assets
S&P's assessment is based on data showing significant exposure to volatile instruments. Almost a quarter (24%) of Tether's collateral is invested in assets such as Bitcoin, gold and loans. In particular, it is the share of Bitcoin that has seen significant growth, increasing the company's overall risk profile.
The fear expressed by S&P is simple, but fundamental to the stablecoin market: if the value of Bitcoin or other investments were to suddenly collapse, Tether might not have sufficient safe funds to cover the huge value of its currency in circulation.
Although Tether is a behemoth with a market value in excess of $180 billion and has shown remarkable resilience to date, the agency is issuing a clear warning.
The Impact on the World of Football
The S&P decision also has a particular resonance in the sporting scene: Tether is the second largest shareholder in the Juventus, holding a significant 11.7% stake in the Juventus club.
The downgrade sends an 'important message' to the company, demanding greater security, reduced risk and greater clarity in order to aspire to an improved rating in the future. A request that also takes on specific weight considering the key role Tether plays in the Old Lady's shareholder base.
Read Next
S&P downgrades Tether: USDT warning in China
S&P's downgrade of USDT shakes the Chinese market: fears, doubts about transparency and tensions in the crypto world rise.
Tether invests €30m in Bit2Me to grow in EU and LATAM
Tether invests EUR 30 million in Bit2Me, the first Spanish-language exchange with a MiCA licence. The deal aims to expand its presence in Europe and Latin America, with a focus on Argentina, bypassing EU regulatory barriers.