They still have to pay the fine in dollars, though. If you fine Tether a trillion dollars, they'll need to find people willing to pay them one trillion dollars

They still have to pay the fine in dollars, though. If you fine Tether a trillion dollars, they'll need to find people willing to pay them one trillion dollars in exchange for newly-minted (and obviously unbacked) Tether. If you fined Tether one quadrillion dollars, they could mint a quadrillion Tether but they definitely won't have a quadrillion dollars to hand over. Also, if you can't pay a fine without dipping into your depositors' money you are insolvent by any reasonable definition.