Doesn’t tether also have a large bitcoin reserve, and does that not still undermine the dollar/us govt bonds?

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They have bitcoin yes. But they have more treasuries than bitcoin. So they are supporting the dollar more than Bitcoin with their economic power.

They are democratizing the access to the dollar worldwide more than the access to Bitcoin

The free market forces are demanding dollars rightnow this is why they are issuing more and buying more bond in case of a credit crisis they can return dollars back. They didn't wake-up start issuing tether without natural free market demand.

If #Bitcoin drop 60% and all their backing was in bitcoin where are they going to find that 60% of USD to pay back?

I am not suggesting that they should back their stable coin with bitcoin