Nevermind the fact that the amount of commercial paper Tether were claiming to hold at one point last year amounted to approx. 3% of the total market for commercial paper in the United States. That would have placed them among financial juggernauts like JP Morgan, Blackstone and the like - somewhat difficult to believe for a company that major banks won't even deal with. They've since wound back their alleged holdings on that front, but they still refuse to provide anything other than attestations.
The running speculation among the Tether-naysayers has been that the comm paper in question may constitute short term loans between related entities within the Tether group of companies (inc. Bitfinance) - backed by BTC. They purchase the BTC using USDT printed out of thin air, creating artificial demand pressure, hence raising the price of BTC, hence over-collateralising the inter-party loans, hence enabling them to write more loans. And that's how you create a giant circular monopoly-money printing machine.
Tether might be totally legitimate, but they sure don't do a good job of reassuring everybody.
And just a reminder of how interlinked Tether is to the system. USDT is not just a provider of liquidity, Tether has also been handing out BTC-collateralised loans left and right:
The stablecoin issuer has loaned billions of dollars to crypto companies, according to a Bloomberg investigation.
www.coindesk.com
/cloudfront-us-east-2.images.arcpublishing.com/reuters/BDAHSHEFXBP2XC7V5SJYIKHORA.jpg)
