> Binance security features also include [...] Like Coinbase, all USD balances are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) and held in custodial bank accounts.
That is for USD only though, only deposits in USD are insured and only on bank failures.
Anything in a coin, even a stablecoin like Tether, USDC, DAI etc is not USD. Stablecoins really are not as "stable" as USD for the insurance reason. They are merely pegged to the USD.
Coinbase and Binance are not SPIC insured which covers some securities but not losses, only situations where the exchange, or bank, fails much like with FDIC.
Most brokerages are both FDIC for USD deposits, and then SPIC for deposits and some securities, not on losses on the market though [1]. Robinhood I believe is only SPIC still [2], but most brokerages are FDIC AND SPIC insured.
FDIC is backed by the US treasury. SPIC is a private company ultimately and not as backed as FDIC but it is the main securities insurance most brokerages use.
Tether is like an individual stock though, even if Coinbase, Binance or other exchanges had SPIC insurance, if Tether (USDT) fails it would be like a stock failing, there would be no insurance even then. The insurance is really at the bank/exchange level if they are insolvent or have no reserves/capital.
Side note: A good use of stablecoins is buying into that stablecoin and then converting to other coins you want, that minimizes fees but keeps tax hit at 1-to-1 since they are pegged to the USD, makes all the cost basis and other accounting easier. A common technique is buying into USDC or DAI and then converting to other coin to reduce purchase fees. Stablecoins are also a "home base" or refuge when the market is falling without going back to USD fully, that is why volume of USDC, DAI, and USDT is so immense right now.
