I remember Circle (USDC issuer) allowing customers to redeem USDC for USD (Fiat) at a 1:1 ratio. Even when the stablecoin lost its peg for a short period of time. That was a few years ago, when several banks collapsed (First Republic Bank, Sillicon Valley Bank, etc). It caused a negative effect on crypto market prices. I can't recall Tether doing the same for its customers.

Anyways, the reason why Tether can't be trusted is because of its shady past. Lack of transparency, lack of regular audits, and constant "money printing" (expanding the circulating supply), are all red flags one must be aware of. USDC takes a more cautious approach. It's also backed by Coinbase. But to each their own. Maybe Tether will last for long? Only time will tell...