S&P Global Ratings has issued a downgrade to Tether’s USDT stability rating, citing concerns about the stablecoin’s Bitcoin-backed reserves. This action follows S&P’s assessment of Tether’s reserve strategy, which indicates potential vulnerability in maintaining a stable $1 peg for USDT. 💰 Despite this rating change, Tether asserts its extensive and well-diversified reserves are sufficient to support all circulating USDTs, while also pushing back against the methodology used by S&P. The downgrade has triggered heightened scrutiny of Tether’s reserve structure as financial markets closely monitor the situation. 👀 The decision impacts Tether’s operations and trading activities, with some market participants exploring alternative stablecoins such as USDC and DAI. This incident highlights the increasing need for transparent and robust reserve management in the world of stablecoins, especially after past events like the TerraUSD collapse. 📉