What Tether is doing is what PayPal is going to do that's why they have issued a Stable coin.
Strategy is simple : Take Dollar from people, issue the Stable coin, and let them play around On-chain with the Stable coin, buy T-Bills with the $ that are deposited to your DeFi protocol earn 5% interest rate. Keep the interest payment with you as profit and rest of your stable coin on chain remains backed by actual $.
Loop runs like this until Fed brings down the risk free rate to 0-2% range Tether/PayPal would keep printing profits. PayPal probably got into this as their share is down by 80% or so if I am correct and there is no easier way to earn $ and pump stocks other than DeFi innovation, well not literally innovation by PayPal rather it's more like a copy trading Tether lol.
For a US citizen it's easier to buy a T-Bill, just go to Fidelity and press buy but imagine for someone who is outside US how is he going to get that 5% risk free interest (assuming roi is 5% as long as Fed doesn't cut rates). That's where RWA comes into picture. Tokenizing real world asset and what's RWA here it's the T-Bill. Similarly, you can do it for Real Estate, Gold and what not in future.