... the thing Bitcoin set out to eliminate? Now it has the same flaws as the regular financial system, but much less efficient. Where do I sign up?

And Bitcoin is not Tether.

Of course but one's not particularly useful without the other. 80% of BTC exchanges happened via USDT. Tether defines the price. You can't separate them.

Banks practicing FRBs have liquidity reserve limits, and are frequently audited, and have to be solvent (Value of all assets minus liabilities exceeds value of all deposits) in order to operate.

Tether is a fly-by-night con job that, to disburse USD redemptions, wires hundreds of millions of dollars to money launderers in the Carribean, who then go ahead and steal most of it.

And when law enforcement starts digging through their books, we discover that a third of Tether's 'reserves' consist of a "I'll pay you guys a few billion dollars, pinky swear", scrawled on a napkin.

It's not fractional reserve. It's straight-up fraud.

Banks are also backed by deposit guarantee schemes, so regular customers assume none of the remaining risk.

> Banks practicing FRBs have liquidity reserve limits

Not anymore, the Fed lowered them to 0%.