This all hinges on exchanges reporting USDT trades as if they are USD trades. This is only plausible if the spot price of Tether remains at $1. They will need t

This all hinges on exchanges reporting USDT trades as if they are USD trades. This is only plausible if the spot price of Tether remains at $1. They will need to regularly inject money to keep the spot price of Tether at $1, but as you say the fees and ponzi can allow this as long as the number goes up. The problem would come if the number stops going up and there isn't enough money to cover all the people dumping the Tether IOUs simultaneously. I assume they cannot cover $25 billion dollars of worthless IOUs. Even more if their assets are also simply bitcoin, which in such a scenario would also be collapsing in price.