S&P Global Ratings has lowered its stability assessment for Tether (USDT) to a 'weak' level, now assigning it the lowest score of 5 on its 1-to-5 scale (where 1 is strong and 5 is weak). Previously, assessments may have placed it at level 4 ('constrained'), but the latest update confirms the drop to the bottom tier. The ratings agency expressed concerns regarding Tether's ability to absorb significant asset value drops and the transparency of its reserves. Tether CEO Paolo Ardoino has dismissed the rating, criticizing traditional financial models as fragile and asserting that Tether is over-capitalized. Ardoino claims the friction with legacy finance validates Tether's innovative model and that the assessment does not accurately reflect the stablecoin's actual reserves or liquidity. [Update 1] New reports clarify that S&P Global adjusted the assessment specifically from level 4 to level 5. This downgrade reflects the agency's evaluation of the stablecoin's ability to maintain its peg and continued concerns over reserve transparency, despite Tether's position as the dominant stablecoin by circulation.