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Banks still have assets to cover the liabilities, they're just not liquid.

Are you claiming Tether has other assets that are not being counted?

No, they don't. In the event of a bank run, a bank cannot cover their liabilities. This is the same thing that you point in tether as a fatal flaw and a "scam".

Timing difference, i.e. majority of assets are not held in cash (it is put to work), so if many people try to withdraw lots of money at the same time, it can trigger a downward spiral (“bank run”).

I’d you’re curious to understand more: https://en.wikipedia.org/wiki/Bank_run

I don't understand, what does that have to do with anything? The issue being discussed is Tether, and how it's totally a pyramid scam since it doesn't hold 100% in reserve.

I said neither thing about Tether, and there is a vast difference between illiquid and insolvent.

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