What Tether is doing is replaying the banking scams from the 1800s. A bank would open up, issue an unlimited amount of its paper currency, collect deposits in other, valuable currency, and operate for a while. Eventually it would collapse and the owners would walk away rich, having fleeced the public of a great deal of their money.

https://en.wikipedia.org/wiki/Wildcat_banking

US banking regulation is nearly weak enough to permit this for regular banking, but not quite. However, US banking regulation is weak enough to permit it as long as you call it "cryptocurrency" instead of "private currency".

> "Commissioner Alpheus Felch recalled that one bank's "cash reserves" consisted of boxes of nails and glass topped with silver coins."

Pithy! A box that's heavy, makes good clinking noises when you shake it, and has only the tiniest bit of money in it. And so apropos for Tether. I wonder if we'll get some similarly pithy remarks about the modern wildcat banks.