But everyone who didn’t just fall off a truck knows Tether is capitalized at maybe 30%, and there’s a lot of mediocre commercial paper in the assets it does hold.
USDC and Tether are completely different asset classes.
USDT is casino chips you have to buy to play the low-cap alt-coin slot machine. USDC has a de facto address within reach of the FBI.
What does this mean?
If USDT fails and goes to 0, people will lose their money, and probably no government will be able to go after the creators of USDT (Bitfinex?) and their "collateral".
If USDC fails, the US government can actually make Coinbase responsible. And that's a public company with a 51B USD market cap. As a holder of USDC, you could reasonably expect to see some money back.
Maybe, maybe not. USDC is not legal tender. Coinbase could easily argue it is nothing but monopoly money with a value of $0USD.
But the point is that the USDT people are already some combination of accused/investigated-for/sanctioned-for misrepresenting the amount and quality of the collateral, seem to have very little to lose by doubling down and to many (most?) people look like a worse credit risk than CoinBase.