[wmf]

When you sell USDT on an exchange the money comes from another trader; this works as long as there are traders who want USDT. If you could redeem and destroy USDT from Tether the money would come from the reserve. If aggregate demand for USDT drops enough then it will matter.

[alisonkisk]

Isn't it Tether itself who "wants USDT"? That's how they maintain the peg.

[wmf]

No, they don't maintain the peg at all.

[ryanlol]

This is strictly not true, Tether makes trades on exchanges in order to maintain the peg.