A company holds 116 tons of gold reserves, comparable in scale to a medium-sized country's central bank, with annual profits expected to reach $15 billion—this seems like an unshakable gold mountain in the global corporate world. However, it is precisely this "behemoth" in the digital asset space, Tether, that was recently given the lowest score in the global authoritative rating agency S&P Global's stablecoin rating system: "5—Vulnerable." On one side is staggering financial strength and asset size, and on the other side is the highest-risk red flag raised by an authoritative institution. This extreme contrast not only reveals Tether's contradictory situation but also reflects the profound growing pains and value re-evaluation the entire cryptocurrency industry faces as it moves from the "Wild West" toward institutionalization.

The "Giant" Behind the Glorious Data: Tether's Gold Empire and Profit Myth

According to an analysis report released by Jefferies on November 26, Tether's current physical gold holdings have reached 116 tons, making it "the world's largest gold holder outside of central banks." Its reserve scale is now comparable to the official reserves of countries like South Korea and Hungary. The company is ambitious, planning to acquire an additional 100 tons of gold in 2025 and invest over $300 million in precious metal producers through Real World Assets (RWA). The market capitalization of its gold-backed stablecoin, Tether Gold (XAUt), has exceeded $2.1 billion, with its issuance doubling within six months. Most notably is its profitability, with full-year net profit expected to touch an astonishing $15 billion. From these metrics, Tether appears to be a profit monster born in the crypto world, backed by the most solid precious metals.

S&P's "Scalpel": Why Dissect the "Vulnerable" Core of the "Giant"?

However, on the same day, S&P Global's assessment report struck like a thunderbolt. In S&P's stablecoin asset quality scoring system (where 1 is "Very Strong" and 5 is "Vulnerable"), Tether's rating was further downgraded from "4" (Constrained) to the lowest "5" (Vulnerable). S&P's blade precisely points to the structural weaknesses beneath Tether's glossy exterior:

• The "Achilles' Heel" of the Asset Portfolio: S&P points out that Tether allocates a significant portion of its reserve assets to highly volatile crypto assets like Bitcoin. Its Bitcoin reserves already account for 5.6% of the circulating supply of its flagship stablecoin, USDT—a proportion that even exceeds the 3.9% over-collateralization rate claimed for USDT. This means that if Bitcoin or gold prices experience a significant decline, the coverage capacity of its reserve assets for the stablecoin will face severe tests, potentially failing to fully support user redemption demands.

• The "Fog" of Transparency: Despite its massive asset size, Tether has long been criticized for its disclosure of key information. Regarding core issues such as who the custodians of its huge assets are, the counterparty risks, and bank account details, Tether has consistently failed to provide sufficiently convincing, continuous, and detailed transparency reports for the market and rating agencies. This "fog" is a major obstacle hindering its trust from traditional finance.

• The "Absence" of Regulation and Segregation: Unlike strictly regulated traditional financial products, USDT currently lacks clear and robust regulatory framework coverage, especially with ambiguous areas in bankruptcy isolation mechanisms. Whether the legal firewall between user assets and company assets is strong enough and whether they can be protected in extreme situations remains an unresolved issue.

• Questions About Redemption Mechanism "Stress Tests": Whether Tether possesses sufficient liquidity to handle large-scale, concentrated redemption waves during market panic or systemic risk, and the effectiveness of its mechanisms, have not been verified through rigorous stress testing.

S&P's conclusion is clear and calm: strong profitability and asset size do not directly equate to the stability and low risk of the stablecoin itself. The rating focuses on structural safety, transparency, credibility, and institutional safeguards. However, S&P also left room, noting that if Tether can reduce its exposure to high-risk assets and significantly improve the quality of information disclosure, there is still room for rating improvement.

The Market's Counter-Choice: The Disconnect Between Rating and Reality

Interestingly, in stark contrast to Tether is Circle, the issuer of its largest competitor, USDC. Circle received a high "2—Strong" rating from S&P due to its high transparency, reserve assets primarily consisting of highly liquid, low-risk U.S. Treasuries and cash, and its active embrace of regulatory compliance. However, the capital market gave a completely different feedback: Circle's stock price has plummeted about 75% from its mid-2025 high, and the company remains in a loss-making state. This reveals a harsh reality: at the current stage of the crypto industry's development, many market participants (especially investors and traders) may value a company's market dominance, profit growth rate, and actual network effects more than pure regulatory compliance scores. USDT, leveraging its first-mover advantage, deep liquidity, and wide range of application scenarios, still occupies over 70% of the stablecoin market share. This "trust in utility" temporarily offsets the warnings of "compliance risk."

Different Paths, Same Destination: Tether's Compliance Turn and the Industry's Institutional Evolution

Faced with the pressure from S&P's rating, Tether is not indifferent. It announced that it will launch a new stablecoin, USAT, specifically designed for the U.S. market in December, fully compliant with the regulatory framework of the GENIUS Act, marking a significant strategic shift. The requirements of this new framework in terms of reserve structure, information disclosure, redemption terms, and risk segregation almost correspond one-to-one with S&P's rating criteria. This indicates that Tether itself is also clearly aware that the future competitive landscape is undergoing fundamental changes.

RWA: The Core Value Anchor Throughout the Narrative

From Tether's massive investment in gold and RWA, to S&P's ratings based on traditional financial logic, to Tether's own move toward compliance frameworks, this series of events points to the same grand trend: digital assets are undergoing a profound "institutionalization" baptism. RWA (Real World Asset tokenization) is precisely the core hub of this transformation. The value of RWA goes far beyond mapping assets like gold and bonds onto the chain to enhance transparency. Its deeper significance lies in systematically introducing the risk control logic, asset verification frameworks, and regulatory compliance standards honed over centuries in traditional finance into the crypto world. It enables the composition, risk sources, and liquidity conditions of on-chain assets to be more clearly identified, assessed, and audited, allowing financial products to gradually shed their "black box" status and present themselves in a more understandable, predictable, and rule-based form.

Conclusion: Seeking the Future in Paradox

The paradox of Tether's coexistence as a "profit monument" and a "vulnerable rating" is a landmark cross-section of the growth process of crypto finance. It highlights the inevitable conflict as the industry moves from a "wild growth" stage pursuing scale expansion to a new "intensive cultivation" cycle focusing on safety, transparency, and institutional construction. For all participants, understanding the direction represented by RWA is not just about paying attention to a new type of asset but also about learning a new language concerning how the future financial order will be built—a language that integrates innovative vitality with a stable foundation. In this era of alternating old and new paradigms and colliding evaluation systems, those who can better master this language, balancing innovation and compliance, market and risk, are more likely to grasp the true key to the next cycle. Tether's story is precisely a tense yet highly enlightening prologue in this grand transformation.