Not really, if they fail because of bank run reasons, it might be better for them to liquidate the assets slowly first, to stave off the run. Ymmv, check the accounting.
There is no possibility of a "bank run" if tether is actually 1:1 backed with USD. But it's almost certainly not, and that's why it's effectively fraudulent
They could be backed in USD denominated illiquid assets that may take time to unwound (it's kinda dumb from a treasury management POV if you keep everything in cash).
They can use overnight instruments, and its still pretty much impossible for there to be a bank run.
But it begs the question, is Tether meant to be a viable stablecoin, or is it a fractional reserve piggy bank for the Tether owners to earn interest from?
Clearly they're running it like the latter. Why would the crypto industry consolidate on something scammy like that?
Exactly everything is insolvent. If tomorrow people were like hey everyone USD is going to fail you’d get the Great Depression unless the fed printed money. And there isn’t nearly enough paper money for it.
That's wildly and obviously untrue. Let's look at the definition of insolvency[1] "when an individual or company can no longer meet their financial obligations to lenders as debts become due."
Take a trivial example - a person with no debts. You have to concede such people do exist in the world.
They are by definition not insolvent, and cannot be. Even if the currency completely collapsed and USD had zero value this would not make them insolvent because they have o debt and therefore no financial obligations.