T-bills are OK, but it's entirely unclear what the "commercial paper" consists of. Amy Castor notes that if Tether gives USDT for free to large customers like Binance etc, that loan would be a form of commercial paper.
> And quite a few exchanges are offering crazy interest rates (up to 10%) for USDT deposits, which strongly implies they're getting some for free
I'd think the 10% is due to the high risk of default. (Someone else receives it, but usually only gives a crypto collateral, there's a fairly high chance of default since if the lender gets wiped there's a high chance the collateral won't be sufficient and it might snowball from there as all the lending platform try to liquidate at the same time)
It's comparable to investing in junk bonds (but since it's call "savings/interests" most users won't realize the default risk.
https://amycastor.com/2021/05/13/tethers-first-breakdown-of-...
And quite a few exchanges are offering crazy interest rates (up to 10%) for USDT deposits, which strongly implies they're getting some for free:
https://cryptoprijzen.com/en/crypto-interest/compare-tether-...