The strongest money printer? Tether CEO responds to FUD: ratings underestimated the monthly cash flow of 500 million USD in government bond interest.

S&P Global has recently downgraded the stability rating of the world's largest stablecoin USDT to the lowest level, once again raising new doubts in the market about Tether. Tether CEO Paolo Ardoino stated that the rating overlooks the group's capital structure, while former Citigroup analyst Joseph Ayoub emphasized that Tether is highly profitable, almost like a money-printing machine that is unlikely to go bankrupt.

S&P downgrades USDT rating: Bitcoin and gold reserves become a concern

S&P Global announced last week that it has downgraded the rating of USDT's ability to maintain its peg to the US dollar to the lowest level “weak”, specifically pointing out that Tether's reserves include Bitcoin and gold, which are high volatility assets, in contrast to traditional stablecoins that primarily use liquidity instruments like US Treasury bonds, thus affecting the stability of its peg to the US dollar.

This move quickly triggered FUD in the market and prompted external parties to once again examine Tether's asset transparency and risks.

(Tether bets on Bitcoin and gold to prepare for interest rate cuts, Arthur Hayes: A 30% drop in shareholder equity will result in zero)

Paolo retaliates: Ignore our $30 billion in shareholder equity and $500 million in monthly government bond interest income.

Tether CEO Paolo Ardoino responded today, stating that S&P's analysis overlooked the overall capital structure of the Tether group. He cited the audit report for Q3 of this year, pointing out that Tether currently:

Total assets: approximately 215 billion USD

Stablecoin liabilities: Approximately 184.5 billion USD

Excess reserves: approximately 7 billion USD

Accumulated surplus: approximately 23 billion USD

S&P made the same mistake by not considering the additional nearly 30 billion USD in shareholder equity ( excess reserves and accumulated earnings ), and did not take into account the approximately 500 million USD profit generated monthly solely from US Treasury interest.

Paolo also subtly referred to BitMEX founder Arthur Hayes's FUD from yesterday: “Some KOLs either can't do math or have motives to speak for our competitors.”

Arthur Hayes poured cold water on it, reiterating concerns about transparency.

It is understandable that Arthur Hayes is not very convinced by this statement. In his reply, he reiterated the views expressed in yesterday's article, emphasizing that Tether is indeed very profitable, but the core issue lies in the fact that some of its assets have high volatility:

Do you have a formal dividend policy or clear rules for over-collateralization? This is a matter of market trust.

Hayes stated yesterday that if Tether buys a large amount of Bitcoin and gold to compensate for the gap caused by the shrinking interest from US bonds as interest rates decrease, then the company will be unable to withstand a significant market correction.

(Tether has become the world's largest independent holder of gold, aiming to create a “gold-backed” cryptocurrency system)

Former Citigroup analyst refutes: Tether is a super money printer and cannot go bankrupt.

Former Citigroup digital asset analyst Joseph Ayoub has come forward to support Tether and refute Hayes' omission of key background information. He stated that he has spent hundreds of hours researching Tether, emphasizing that the reserve disclosures seen by the outside world do not equate to all the assets of the Tether group.

He provided the following three observations on this matter:

Tether's actual corporate assets far exceed what is publicly disclosed: The information released by Tether is merely to “assure the outside world of the USDT reserves” corresponding to the ledger, while the company actually holds equity investments, mining operations, corporate reserves, more undisclosed BTC, and historical surpluses.

Tether is highly profitable and has significant equity value: The 120 billion USD in U.S. Treasury bonds that Tether holds can generate billions of dollars in basic profits each year, making it one of the most efficient cash-generating businesses in the world with fewer than 150 employees. Previous financing news indicated that its corporate value could range between 50 billion and 100 billion USD.

Tether's reserves are safer than banks: banks typically have only 5% to 15% of high-liquid assets in their reserves, while the rest are low-liquid; in contrast, Tether's reserve structure is healthier. The only difference is that Tether does not have a central bank backing.

Ayoub's conclusion is clear: “Tether will not go bankrupt; on the contrary, it has a money printing machine.”

Is this article the strongest money printer? Tether CEO responds to FUD: the rating underestimated the monthly cash flow of 500 million USD in Treasury bond interest, first appeared in Chain News ABMedia.