Now, the USD is the most trustworthy fiat currency on the planet, but it's a little (ironic? don't know) interesting the USD in turn is also a scheme of sorts.

Now, the USD is the most trustworthy fiat currency on the planet, but it's a little (ironic? don't know) interesting the USD in turn is also a scheme of sorts. Albeit with a very powerful guarantor. But as others have said here, the banks don't hold funds for all their accounts. If each Tether was backed not only by funds in a bank, but actual funds at the Fed, that would be a true 1:1 backing. https://www.econlib.org/who-should-be-allowed-to-deposit-money-at-the-fed/ https://www.econlib.org/who-should-be-allowed-to-deposit-mon...