This question Troubled me for long time,Thanks for answer
USDT are equal to accounts payable for the exchanges. It is not any more risky than having btc or any other tokens stored at an exchange.
The only risks is you are trusting the exchanges to keep your coins safe and not steal them. If they run away, than yes USDT and all of the tokens on the exchange becomes worthless.
on it's own, it is not possible for USDT to collapse regardless of how much or how little the marketcap of USDT is.
USDT is not the printing of new money. It exists because you deposited money into the exchange.
even if there is a so called bank run, that shouldn't be a problem, because unlike a bank, exchanges are not in the business of fractional-reserve banking.
and no, I disagree that USDT needs to go. Sometimes an investor wants to sit on the sideline for when they believe the market will go down, and that is when they will park their money into USDT.