Accessible description / save-you-a-click:
Left image: USDC: kitchen cabinet with a glass door; you can see on the inside a stack of dishes has mostly toppled, held up only so long as the door is closed
Right image: USDT: photo of kitchen cabinets with completely opaque wooden doors
(edit: spelling)
The systems that highlights and addresses problems with more transparency is the one that will be more robust and not blow up, adjustments can be made and it is a pressure release valve.
That's what keeps the price 1:1.
Effectively, they will redeem only for themselves.
Could be a neat way to do no KYC or ownership verification or dealing with messy bank transfers to dodgy people, etc. Hides the location and/or existance of funds from redeemers and those able to trace money movements too.
Or could be a way to hide a delicately balanced stack of cards...
it still requires capital from their reserves to do what you describe, purchasing USDT for $1 each
the redemption mechanism is an incentive on its own. when Tether is below $1 purchase it yourself (pushing up the price of Tether) and go to the redemption window and get $1 for it regardless.
and the other thing is that. If I had a business like Tether, believe me I would be counting every single cent in my holdings 7/24/365.