@davidhay, thanks for the video! I think it is ok if Tether is using a fractional reserve system, since its main purpose is to provide liquidity. But they will need to be transparent with it and should not claim that it is 100% backed. I think if it does collapse, not only their market cap will be wiped out, there is going to be a strong possibility of panic selling at exchanges that use USDT.

Personally, I try not to hold USDT as well on exchanges.