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Tether's just a fractional reserve bank without all the regulation. Of course they survived. If they ever do suffer a bank run I wouldn't be surprised if some government bails them out.

Tether, centralized exchanges... They are all just poorly reinvented banks really. Cryptocurrencies went wrong the second they showed up. They were supposed to replace the USD, not turn into USD backed tokens.

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Why would a government bail them out?

I’m not quite sure they pose that much risk to the wider financial markets.

Because Tether would be (probably already is) an incredibly valuable honeypot

Stablecoin issuers are one of the largest treasury holder today. They are growing and capitalising fast. It's a matter of few years before they pose systematic risk outside crypto.

The designers solved for a deficiency in their bank accounts not anyone else’s.

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