Yeah, but in the US the FDIC insures my bank account up to $250,000 (per account!). Tether has no such guarantee, which makes Tether's financials a lot more important.

Which is why banks are highly regulated, have reserve and capital requirements and central banks acting as lender of last resorts.

They are, however, backed by the FDIC.

Only up to 250k. Any more and you need your own insurance.

$250k per account, up to 6 accounts. So the FDIC insures up to $1.5 million. If you have more then that, I think you can find other ways to secure your money.

Anything above FDIC insurance limits and you’re in US Treasuries, backed by the full faith and credit of the US Treasury. They’re one of the safest financial assets in the world. The risk of default is almost, but not quite, zero.

the fed has never not bailed people out, whether it’s money market funds or anything else even if not fdic insured

The FDIC could not make the system solvent in the event everyone tried to redeem their funds. It can only keep up confidence to try to prevent people from all trying to redeem their funds.

The government promising by law to pay everyone back does build more confidence than Tether's 2.3 cents + outstanding debt from other exchanges.

This is why I stick with defi stablecoins.

Pro tip: Modern finance is also a Ponzi scheme.

No, it's not a Ponzi scheme. A Ponzi scheme, "is a fraudulent investing scam promising high rates of return with little risk to investors. A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers." (https://www.investopedia.com/terms/p/ponzischeme.asp)

Modern finance is regulated. Schemes that aim to generate a return have to file a prospectus and must be audited and exposed to legal liability should they fail to follow the rules.