> Why would Tether collapsing bring down USDC? Theoretically, USDC is backed (or more backed) by dollars.

Because they're probably doing similar tricks with reserves and non-audit attestations.

https://www.coindesk.com/layer2/2022/03/24/correctly-was-wro...

"Grant Thornton has switched from calling the $52.3 billion stablecoin’s reserve accounts 'correctly stated' to the more equivocal 'fairly stated.' Here’s why that matters."

USDC is not backed 1:1 by USD dollar`, they removed that claim. https://cointelegraph.com/news/coinbase-removes-backed-by-us...

I don't know why they all need to play this game. I guess because of their terrible performance after the IPO, they feel the need to make returns and using the reserves for riskier investments is just too tempting.

I'm surprised somebody like Chase hasn't started their own stablecoin and proven openly: we're backed 100% by T-Bills. We get some profit from holding your money, but it's small and safe. Why do they all have to be shady?

Banks did this before the civil war, see https://daily.jstor.org/banks-own-private-currencies-in-19th... the article doesn't go into detail, but says that congress "effectively ended the practice" after the Civil War was settled.

I suspect that if any bank tried to push out their own Crypto the Fed would have /Questions/ for them and in general it wouldn't work out well for the bank in question.

The current claim is now:

USDC is fully backed by cash and short-dated U.S. government obligations, so that it is always redeemable 1:1 for U.S. dollars.