[imtringued]

This is so close to the truth it hurts.

When you think about it, banks simply agree to transact with each other and thereby offer a payment network. When you have a Chase bank account what your balance is showing is how many "Chase dollars" Chase is owing you. Those dollars can be redeemed 1:1 for physical dollars.

>If the total outstanding coins isn't fully backed by real USD, then that bank will eventually run.

Well, the way banks operate they also only need to keep a fraction of their deposits liquid and immediately withdrawable. However, there is one big difference here. The Fed is actually the one providing the inter bank payment infrastructure with so called bank reserves which can only be held on servers owned by the Fed. A lot of the QE stuff is just there to make treasuries as liquid as deposits. It's not money printing. It's more like lending liquid money in bank accounts that isn't locked up via a certificate of deposit.

The big problem that Tether and so on have is that the central bank isn't on their side. So the only safe investment is just plain dollars. Running an unregulated bank is going to backfire at some point.