It's also a general expression of lack of confidence in the US banking system.
Exchanges that offer true "USD" trading pairs ultimately have to store that cash [at a bank] somewhere. But at which bank? Before this week, most people probably wouldn't have paid attention.
Some like Coinbase offer passthrough FDIC insurance [1], but again, if you have more than $250k you're potentially s-o-l just like an SVB depositor.
So weirdly, 1 USDT ("definitely sketchy but somehow has never broken peg") all of a sudden may seem less risky than 1 "USD" at [which bank again?].
Exchanges that offer true "USD" trading pairs ultimately have to store that cash [at a bank] somewhere. But at which bank? Before this week, most people probably wouldn't have paid attention.
Some like Coinbase offer passthrough FDIC insurance [1], but again, if you have more than $250k you're potentially s-o-l just like an SVB depositor.
So weirdly, 1 USDT ("definitely sketchy but somehow has never broken peg") all of a sudden may seem less risky than 1 "USD" at [which bank again?].
[1] https://www.coinbase.com/legal/insurance