This is the oracle problem. The guarantees of blockchain and smart contracts only work with things on the blockchain. You can’t put US dollars on the blockchain

This is the oracle problem. The guarantees of blockchain and smart contracts only work with things on the blockchain. You can’t put US dollars on the blockchain obviously so you create a cryptocurrency that is on the blockchain and peg it to the US dollar. In reality you haven’t solved anything because there’s a trust element. It’s just moved. Also you need deep reserves to maintain a peg. There have been several attempts at an algorithmic stablecoin but they’ve had a tendency to collapse spectacularly. Maintaining a peg in the real world is tricky too. Real world pegs can and do fail.