> My own theory of what's actually going on here is that Tether is intentionally obtuse, because it allows them to make seignorage profits against their own users.

From https://www.bloomberg.com/news/articles/2022-12-14/hedge-fun...:

> Tether concealed the loss of more than $850 million of reserves to a Panamanian entity called Crypto Capital Corp. as recently as 2018, the New York Attorney General found. In a separate case, the Commodity Futures Trading Commission found Tether didn’t have enough fiat reserves to back circulating tokens more than two-thirds of the time, in a period between 2016 and 2018.

so it's more than just being obtuse.

I don't think they're playing with the trust of their own stablecoin to get cheap USDT, it'd be better for them to be more trustworthy and have more USD to invest in safe investments with low interests, but they're probably losing some market share to more trustworthy (US-based) stablecoins because of how shady they look.