A smart contract cannot hold USD because it doesn't exist on a blockchain. With USD, all you get is credit, and going through a Blockchain when the weak link is

A smart contract cannot hold USD because it doesn't exist on a blockchain. With USD, all you get is credit, and going through a Blockchain when the weak link is the USD debitor doesn't make much sense (blockchains are decentralized, credit is inherently centralized). Secondly, blockchains are generally too slow due to their broadcast-all nature. There's really no reason to broadcast my coffee purchase to the entire world so they can embed it in history for all eternity. The merchant and me can keep the receipt if we want, but there's little reason for anyone else to participate, particularly if we want to do it cheaply/efficiently.