The first sentence in the white paper of Tether (USDT) says the following. A digital token backed by fiat currency provides individuals and organizations with a
robust and decentralized method of exchanging value while using a familiar accounting unit.
Now don't get me wrong. I use USDT a lot, in fact I love it. The fixed price of $1 while being a cryptocurrency makes crypto transactions for purchasing services easy and beautiful.
But I keep thinking of how original paper money was created. In history we had gold for trading. Then gold became inconvenient so bankers offered to hold gold for paper that verifies how much gold is owed to customers. Then this paper became more convenient and was used instead of gold with the trust that its backed by gold. Then this paper a long time later became a currency that isn't backed by gold anymore.
Could the same happen with USDT. If everyone decided to claim original $$$ with their USDT, would Tether Limited issue it all making the price worthless?
Anyway the point I am trying to make is that Tether (USDT) is centralized around the Tether Limited's will to keep it going. This company is basically like a bank too.