No I'm not assuming their honest. I think the foundation of Tether is a pile of lies. But I do think that the people involved have a visceral enough understan

No I'm not assuming their honest. I think the foundation of Tether is a pile of lies. But I do think that the people involved have a visceral enough understanding of their own financial best interest that they wouldn't accept IOUs printed out of literally nothing. You're assuming counterparties which are deeply financially stupid. Tether being collateralized loans against crypto actually offers a service that people would buy, and offers a mechanism to defend the pin by having the loans be dollar denominated. I don't assume they're honest, but I do assume they're out for(what they believe to be) their own self-interest. It also explains why Tether is issued as bitcoin increases and not when it collapses. If Tether was just IOUs the demand for them would boom as bitcoin price fell and people sold bitcoin for Tether at the top. All the printing during the run up to $50k makes sense if it is collateralized crypto, it makes no sense if its IOUs that sops up excess bitcoin selling demand.