If Tether starts to collapse, then the holders of the $73 billion tether are going to be desperate to dump it for something else. They may try to dump it for real dollars, but they may also dump it for bitcoin and other "real" cryptocurrencies.
Tether collapsing might even cause a massive bitcoin price pump.
A more probable scenario is that trading pairs against USDT will just get halted.
Predominantly retail traders who placed limit orders and didn't react to changing market conditions as fast as bots/institutions. Perhaps also some speculators who believe USDT may be able to reclaim the peg.
That's what I look for in a currency that dreams of replacing the dollar: a massive price pump.
The US dollar has recently been experiencing a massive price pump priced in Turkish Lira. Does that make the dollar a bad currency? https://www.investing.com/currencies/usd-try
Your currency experiencing a price pump just means it's been collectively deemed to be stronger and safer than other currencies and undergoing a re-valuation. It literally happens to all currencies on the planet all the time.
In the same 5 years, the value of bitcoin has increased 1,000% against the US dollar.
Care to expound on the consequence to the citizens of Turkey? Because that is often overlooked when using this glib analogy.
I'll do it for you: your argument is meaningful at the expense of the livelihood of millions of people. BTC is a money laundering mechanism, the economy of Turkey is made of real people. The two are not comparable.
Turks who chose to trust their monetary savings in Lira are doing terrible. Their savings have been destroyed.
Turks who chose to trust their monetary savings in Dollars are doing ok. They're still getting debased, but slower than their fellow citizens. And relative their fellow citizens, they're doing amazing.
Turks who chose to trust their monetary savings in Bitcoin are doing incredible. They took a risk trusting something that many smart people say is dangerous and isn't worth trusting, and they've been radically rewarded for it. Their savings can't be debased and faith in the currency is only growing, even if it's happening in volatile fits and spurts.
Bitcoin is certainly used for money laundering, but so is every other currency. Banks have repeatedly been caught aiding criminal organizations. You're conflating some people using a tool for bad things with the tool itself being necessarily bad. It's not a good argument.
The bitcoin economy is also made of real people, like myself, who work a real job and pay my taxes, but choose to trust my savings in money that can never be arbitrarily debased by easily corruptible humans.
https://amp.theguardian.com/global/2009/dec/13/drug-money-ba...