Virtually every take I read on this forum is uninformed. To hear it straight from the horses mouth, here's Matt Levine + SBF getting into the realities of tether (skip to 48 minutes): https://open.spotify.com/show/1te7oSFyRVekxMBJUSethH?si=05bd...

I agree with the general sentiment around tether acting very opaque / shady. That said:

1. creation/redemption of tether (read: actual USD wire transfers) has been done on the magnitude of billions of dollars a time by major players in the space

2. during UST collapse, something like $15b of tether was redeemed in less than 2 weeks. so they obviously had that much cash on hand at the time.

3. the academic paper that attempted to show that tether was being created to pump up bitcoin has an extremely simple alternative explanation: as bitcoin went up, holders of bitcoin sold it for tether on centralized exchanges on the way up.

so, IMO they could very likely have some bad commercial paper on their books, but i think its much more likely than tether is worth 90 cents on the dollar and not 0, and in the case that it is worth 90 cents on the dollar, it would be extremely likely to continue to trade at par as there's very unlikely to be a scenario which forces any kind of large-scale redemptions.