Should have specified, you'd need to convert tether to bitcoin on a different exchange, then sell the bitcoin on Coinbase (or any other real-dollar exchange).

The point is that 1 dollar buys the exact same amount of bitcoin as 1 tether.

but kraken does: https://trade.kraken.com/charts/KRAKEN:USDT-USD

You are correct; its USDC token is backed by audited USD$.

Tether drives the price of Bitcoin (and other cryptocurrencies), which they do support.