It shouldn't be. Not for a dollar-pegged asset. Fractions of a cent on billions of dollars, dollars easily lent and borrowed every day, every minute, is millions of dollars a year for an arbitrageur [1].
Hundreds of billions of dollars are deployed into funds exploiting smaller differentials on rates and futures curves.
> what patio11 has said would happen for what 4 years now?
Four years isn't long. At the first sign of tight markets, the damn thing fell apart to the tune of 5%.
> that's a no-brainer choice for someone so convinced that Tether is done for?
People are shorting Tether [2].
The problem is counterparty risk. When Tether busts, you want someone on the other side who isn't all in on crypto. That's not easy.
[1] Coinmarketcap shows $0.9989 for 1 Tether, an 11 bp spread. Call money is 2.75% [1], or around 75 bps per day; too expensive. But the repo rate is 80 bps [2]; less than a basis point a day. Borrow a billion against collateral, buy one billion Tether, redeem it for one dollar each and pay back the loan. You'll make, round trip, a $1mm profit [c]. In one day. Unless we're arguing there would be $1mm transaction costs for this trade, one must ask why nobody is doing it.
[a] https://www.bankrate.com/rates/interest-rates/call-money/
[b] https://www.newyorkfed.org/markets/reference-rates/tgcr
[c] [$1bn - $1bn * 0.9989] - [$1bn * (0.8% / 365)]
[2] https://www.wsj.com/articles/short-sellers-bet-tether-crypto...