Can someone imagine a world where the fine for tether is sufficiently large , that they dont have a capacity to pay it, and thus, blowing up the entire thing ?
Like trying to fine the US Government.
If you fined Tether one quadrillion dollars, they could mint a quadrillion Tether but they definitely won't have a quadrillion dollars to hand over.
Also, if you can't pay a fine without dipping into your depositors' money you are insolvent by any reasonable definition.
To a point, and that point is far larger than any of us imagined.
But the Titan / Titanium collapse shows that you can't print money forever (or in the case of Titan / Titanium: print money automatically). It only takes a small downturn to make everything go to crap.