[griffinheart]

When is tether org involved in this?

From your example the only thing that happened is that now you hold x euros and Kraken holds x amount of USDT.

Unless Kraken goes to Tether org and asks "hey I got these USDTs, please give me the USD" no redemption has occurred.

That some people can in effect transact USDT for fiat via other mechanisms (like your example above) says nothing about Tether org backing or reserves.

Until you go to Tether org with your USDT's and ask them for USD you won't know if they have the reserves.

[tim333]

The reason tether stays at $1 is because the tether org or their delegates buy or sell to keep it there. They have to or the whole thing would become untethered as it were.