The USDT whitepaper states that the objective of creating USDT was to combine the unrestricted nature of cryptocurrencies, that is to send money between users without a trusted third-party intermediary, with the stable value of the US dollar.
It's important to highlight the reserve breakdown of Tether. Commercial paper and certificates of deposits form a major chunk of USDT reserves followed by cash and bank deposits and reserve repo notes and Money Market Funds.