Tether | Bluechip

USDT is fully backed by reserves held by Tether International SA de CV. Reserves are primarily invested in US treasury bills, which present some of the lowest credit and duration risks while trading in a highly liquid secondary market.
Tether invests a portion of reserves in risky assets like secured loans, corporate bonds, gold, and bitcoin. While Tether has identified Cantor Fitzgerald as the primary custodian for US treasury bills, it does not disclose custodians for other assets.
Tether has acquired a Digital Asset Service Provider (DASP) license in El Salvador. However, El Salvador does not have the requisite regulatory capacity to ensure effective external oversight.
USDT reserves are not isolated from Tether's corporate funds or held in bankruptcy remote structures. Stablecoin holders will likely be treated as ordinary creditors in case of insolvency. The issuer's license does not mandate such key provisions.
Tether has concentrated governance authority. One multi-sig holds unbounded mint, freeze, or blacklist capability. No deployment has a timelock on any privileged action. No onchain reserve feed exists, and no mint path references backing.
Tether publishes quarterly attestations of reserves from an independent accounting firm. The issuer has also completed a full audit of the 2025 financial statements from KPMG US with an unqualified opinion.
Tether has consistently fulfilled redemptions. This has helped USDT regain the $1 peg through multiple stress tests since 2014. However, access to primary liquidity is restricted to high net-worth users or institutional users.
Suitability: USDT is suitable for non-US, institutional users or high net-worth traders who can onboard with Tether to directly access the mint and redeem mechanism. Users who are unable to do so will need to rely on secondary markets.
USDT is only suitable for users who want to access its deep market liquidity, volume market share, and breadth of trading pairs. Majority of retail users and passive market participants are better served by other, more transparent & regulated options.

The following actions by Tether may lead to a rating upgrade from C to B-.

Increase the frequency of reserve attestations from quarterly to monthly.
Incorporate a transparent and reasonable policy for redemption timelines in the company’s terms of service.

USDT is backed by US treasury bills, secured loans, corporate bonds, gold, and bitcoin. Reserves are not segregated from the issuer's corporate funds.

Market makers maintain the peg through arbitrage with the underlying reserves. Only institutional or high net-worth users can directly mint or redeem with the issuer.

USDT is issued by Tether International SA de CV, registered in El Salvador and owned by the Tether Group. The company is managed by Paolo Ardoino as CEO.

The issuer's management has a history of questionable business practices, including the co-mingling of reserves with corporate funds.

This factor evaluates technical implementation using sub-factors that cover smart contract quality, oracle & bridge risk, supply integrity, and more.

This rating was published under a previous version of our methodology, which did not assign a standalone score to this factor.

This factor evaluates censorship resistance using indicators like regulatory oversight, asset custody, and governance controls.

Decentralization is not a key objective for Tether, who prioritizes compliance over decentralization. Therefore, this factor is not assessed.

USDT is issued by a Tether International SA de CV, which holds a Digital Asset Service Provider (DASP) license in El Salvador.

The issuer publishes quarterly attestations of reserves, and has recently completed a full audit of 2025 financial statements from KPMG US.

This factor evaluates external feedback using indicators like prediction markets, social sentiment, perpetual futures, and more.

Currently, we do not assign a standalone score to this factor. An independent assessment of external feedback will be included in future iterations.