The other difference is that loaning out to unconnected parties /= selling the tokens and keeping the uncollateralized bit as profit. Banks with outstanding loans might have issues with the timing of repayments, they might more rarely make so many bad loans that their expected future income is less than they loaned out, but they haven't simply pocketed the money depositors paid in.

And it's critical to note that Tether has, in fact, refused to process any redemptions for any US client since 2018.

I’m wondering why non-US intermediaries couldn’t do it?

According to their stated policy (https://tether.to/fees/), a non-US intermediary would have to:

* Pay them a nonrefundable $150 fee.

* Wait for your account to be verified, if you're approved - they have "sole discretion to approve or not approve accounts"

* Send them a minimum of 100,000 USDT

* Pay an additional $1000.

To be clear, it's likely that all of this is a lie and they simply aren't processing redemptions for anyone. I'm not aware of any documented story from the last few years of someone successfully performing a Tether redemption. The US policy is just easier to talk about because it's explicit: they say, in black and white (https://tether.to/faqs/), that "no issuance or redeeming services will be available to these users".

There's no evidence that Tether does redemptions for anyone.

If you ask any trading desk in the space they will tell you they personally regularly do this.

What bank did the wire transfer come from?

"When there's some unexpected macroeconomic issue, which empirically happens with some regularity, they have massive problems as loans default en masse (or everyone tries to redeem their token for USD at once.)"

"Nobody knows you're swimming naked until the tide goes out ..."