Lets say I buy for 1000$ of Bitcoin on Coinbase, send it to Binance (they support tether) , and then I successfully trade it for 1100 USDT.
Where did Tether get cash in this equation? Coinbase has the fiat dollars. Tether almost freezes fiat. with a good trading strategy I can use 1100USDT and buy 0.12 BTC.

If an exchange starts paying out dollars to tether, it beats the entire purpose of using tether. Your using it wrong if you want USD in the end.

I dont believe tether has money because it doesnt make sense. In my country I cant get actual US dollars from tether, so maybe its a regulation issue.

Tether fascinates me, but it feels like a dangerous game.