S&P Global Ratings Evaluates Stablecoin Stability: Half Meet Adequate Standards

The update gives market participants a broader risk screen, but it does not point to uniform improvement across the sector: S&P said significant differences remain between issuers. For USDT users, the practical issue is not the headline ratio alone, but how an individual token scores on reserves, liquidity, redemption and operational dependencies.

The assessment is positive in aggregate, uneven by issuer

S&P Global Ratings said that two of its 11 assessments were revised to a weaker level over the past three quarters, while the other nine remained unchanged. The agency’s assessment scale has five levels: very strong, strong, adequate, constrained and weak.

A separate Fintech Singapore headline identifies Tether among three stablecoins rated weak by S&P Global Ratings. Because the available report does not provide the full table or supporting detail, that point should be treated as a reported classification rather than as a complete explanation of USDT’s risk profile.

The central message is therefore mixed. More than half of the assessed stablecoins meet the “adequate or above” threshold, but the group still contains meaningful dispersion. That matters for payment firms and trading venues deciding which settlement rails to support, particularly where stablecoins are used for cross-border transfers or treasury movements.

What S&P is actually measuring

S&P launched the SSAs in December 2023 to improve transparency around stablecoin risks. The framework considers peg stability, liquidity and other indicators, rather than treating the token’s stated redemption value as sufficient evidence of low risk.

The underlying asset assessment examines exposure to credit, market and custody risks. It also considers overcollateralization, liquidation mechanisms where they exist and the adequacy of reserve funds. The broader SSA can then be adjusted based on governance, the legal and regulatory framework, redeemability, liquidity, technology, third-party dependencies and the issuer’s track record.

That distinction is important for institutions. A stablecoin can have assets that appear stronger on a standalone basis, while receiving a weaker overall assessment after governance, redemption or dependency risks are considered. For businesses building merchant acquisition or settlement workflows, those operational factors can directly affect the ability to move from a token balance to fiat liquidity when required.

The same logic applies to exposure management. Firms reviewing several digital-dollar instruments may benefit from using a portfolio concentration risk framework alongside stablecoin-specific analysis, rather than treating all dollar-pegged tokens as interchangeable cash equivalents.

The next operational checkpoint

The immediate question for banks, payment companies and exchanges is how these assessments translate into access policies. A weaker SSA does not by itself establish that a token will lose its peg, but it signals that reserve quality, liquidity, legal structure or operating dependencies require closer review.

The market is also continuing to invest in stablecoin payment infrastructure. TechAfrica News reported that African stablecoin payment platform Yellow Card raised $40 million to expand its infrastructure and increase merchant adoption across the continent. That development points to growing demand for stablecoin settlement rails, while S&P’s findings show why institutional integration will depend on issuer-level risk controls rather than adoption figures alone.

For traditional banks, the implication is practical: stablecoin connectivity will require differentiated limits, redemption procedures and counterparty reviews. The infrastructure opportunity is expanding, but the usable digital dollar will be defined by the quality of its settlement and risk-management plumbing.