It's not dollars.
It's not Bitcoin either - not entirely, at least.
It's loans to miners, backed by Bitcoin.
Follow my train of thought on this.
Tether is secured by these loans, not cash.
Instead, you opt for loans - like US bonds (loans to the US Treasury).
What if, instead, you called up Bitcoin miners, and offered them a lifeline, promising them...
Miners are happy because...
And the beautiful part in all this, the risk Tether would be running...
The real reason is that USDTs ARE backed, by the worst collateral possible - the balls of Bitcoin miners. Tether controls Bitcoin.
It's absolutely brilliant, if you ask me.