As reported by Coindesk, investment bank HSBC highlighted that S&P Global Ratings’ downgrade of Tether’s reserve assessment to 'weak' underscores the 'de-pegging' risk inherent in stablecoins. The report explains that if holders rush to redeem, stablecoin issuers must maintain highly liquid and low-risk reserves to avoid price deviations from their peg. Tether's USDT, the largest stablecoin, faces increased scrutiny due to its reserve composition, which includes higher-risk assets. HSBC noted that this downgrade could have broader implications across exchanges, trading pairs, and DeFi infrastructure. The bank emphasized that regulatory focus on reserve quality, governance, and transparency is becoming essential for stablecoins to scale into mainstream payments and institutional settlement.
HSBC Warns of De-pegging Risk After S&P Downgrades Tether's Reserves
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