Tether's just a fractional reserve bank without all the regulation. Of course they survived. If they ever do suffer a bank run I wouldn't be surprised if some government bails them out.
Tether, centralized exchanges... They are all just poorly reinvented banks really. Cryptocurrencies went wrong the second they showed up. They were supposed to replace the USD, not turn into USD backed tokens.
Stablecoin issuers are one of the largest treasury holder today. They are growing and capitalising fast. It's a matter of few years before they pose systematic risk outside crypto.
Tether, centralized exchanges... They are all just poorly reinvented banks really. Cryptocurrencies went wrong the second they showed up. They were supposed to replace the USD, not turn into USD backed tokens.