That's even better. Let's say it was a scam for the first 5 years. Total scam, they spent all the money on drugs. It would only take a year for the short-term low-yield US treasury interest on the rest of the assets to completely pay Tether back. That's only possible because Tether has been growing. It would take more than a decade of interest if it had merely doubled in size.

The strong and risky assumption here is that tether actually received money and put it in some paper.

But what many believe is that tether received crypto from the big exchanges and put it in crypto stuff that yields more crypto, so the billions of circulating tether is not backed by billions of Treasury bills or Chinese real estate: they are for a significant part backed by various tokens which have probably gone to zero since.

Ah, that is an entirely different kettle of fish.

So why would people use Tether as opposed to Coinbase's stablecoin?

well, cause they allowed the aforementioned crypto-as-if-it-was-USD scheme.