the term is contagion. and in this case it is probably hyperbolic, but basically when people rely on one asset as a medium of exchange, and that asset turns out to be of poor quality or worthless, then it affects many other assets and businesses.

if balance sheets and collateral for loans for big businesses were all in tether it stopped being redeemable or traded at $0, the businesses would have nothing on their balance sheet and all their lenders would realize the collateral was also missing, and the lenders also would realize they wouldn't get paid and had lent on bad assurances. The lenders would also lose money on all those loans, and their capital partners would lose money (private equity firms and their limited partners) and everyone that relied on payouts from the PE firms would have to change their forecasting, and the PE firm would not be investing in the economy anymore, making a hole in that market. Depending on how many PE firms were doing this it could grind a significant part of the economy to a halt.

good news is that typically the government fills in the gap. but people don't like that.