Why was a company with $15 billion in profits and the world's largest gold reserves deemed "most vulnerable" by S&P?

introduction

We previously introduced Tether, the leading issuer of stablecoins. On November 26th, a Jefferies analysis report showed that Tether currently holds 116 tons of physical gold, making it the "world's largest gold holder outside of central banks," with reserves approaching those of central banks in countries like South Korea, Hungary, and Greece. The company plans to add another 100 tons by 2025 and invest over $300 million in precious metal producers through RWA. Its gold-backed stablecoin , Tether Gold (XAUt) , has a market capitalization exceeding $2.1 billion, doubling its issuance volume within six months; and its annual profit is projected to reach a staggering $15 billion .

However, this highly profitable company with massive reserves was given the lowest rating (5 – Vulnerable) in the stablecoin system by S&P Global on the same day. Why such a stark contrast?

Why did S&P downgrade Tether to the lowest rating?

S&P rates the asset quality of stablecoins on a scale of 1 to 5 (very strong to vulnerable). In this assessment, Tether was downgraded from "4" (restricted) to "5" (vulnerable).

S&P's core concern is the lack of transparency and risk levels in the reserve structure .

Specifically, it includes:

• The proportion of high-risk assets is increasing : Tether's Bitcoin reserves now account for 5.6% of USDT's circulating supply, higher than USDT's 3.9% overcollateralization ratio. If the prices of assets such as BTC or gold fall, the reserve coverage may be insufficient.
• Limited information disclosure : Tether has long failed to provide sufficiently transparent disclosure regarding key details such as custodian institutions, counterparties, and bank accounts.
• Lack of a sound regulatory framework and asset segregation : Currently, USDT lacks strict bankruptcy segregation and regulatory filing.
• The redemption mechanism has limitations : there are still questions about whether there will be sufficient liquidity during large-scale redemptions.

S&P also stated that Tether's rating could still improve if it can reduce its exposure to high-risk assets and improve the quality of its information disclosure.

II. USDC received a high rating, but the market did not accept it.

USDC, the second-largest stablecoin by market share, issued by Circle, received a "2 - Strong" rating in this assessment, showing significantly greater recognition from S&P compared to Tether.

It can be seen that the S&P 500 has an overall preference:

• Highly transparent centralized stablecoins (such as USDC)
• Simple mortgage structure, high over-limit ratio, and high proportion of safe assets.
• Complete information disclosure and clear regulatory path

The market is cautious about decentralized stablecoins (such as USDe and USDS) because their collateral is mostly comprised of "high-risk digital assets." However, the market's attitude differs from that of the S&P. Circle's stock price has plummeted from a high of $298 in June 2025 to $72, a drop of 75% , and the company remains unprofitable. The capital market values revenue generation, growth rate, and business model more than regulatory ratings themselves.

III. Tether is on the same "regulatory path" as Circle.

Despite having the lowest rating, Tether seems to have recognized the importance of regulation.

Tether has announced the launch of its US-based stablecoin, USAT , in December. The new framework will be fully integrated into the regulatory system of the GENIUS Act . In terms of reserve structure, disclosure mechanisms, redemption terms, and risk isolation, the regulatory requirements almost perfectly align with S&P's rating standards.

This means that the competition among stablecoins in the future will no longer be about "who has the largest market share", but rather "who is more compliant with the regulatory system".

IV. The value of RWA is becoming apparent.

From Tether to Circle, from asset exposure to disclosure mechanisms, and then to the implementation of regulatory and rating systems, this series of events all point to the same direction— digital assets are becoming institutionalized, and RWA stands at the center of this transformation.

RWA's value lies not only in enhancing transparency and credibility, but also in bringing traditional financial risk control logic back to the blockchain, allowing asset structure, risk sources, and liquidity to be more clearly identified and verified. Financial products thus escape the black box, presenting the market with clearer rules and a more robust structure.

For anyone focused on the long-term trends in digital finance, RWA is a crucial entry point for understanding the nature of assets, assessing risks, and discerning the industry's direction. It is not an asset, but rather a language for understanding the future financial order.

As the industry shifts from extensive expansion to systemic competition, mastering the knowledge system of RWA is a key tool for seizing the new cycle.