There are lots of crappy stable coins which promise near 1 to 1 exchange rate but then change the rate and disappear.
But, let’s look at a decent stable coin like - USDC .
Circle USDC User Agreement is the ‘promise in writing' for the coin. The following statements are part of the ‘promise’ document -
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…No guarantee of price stability
…Subject to the limitations set forth in this User Agreement, (i) when Circle tokenizes U.S. Dollars for USDC it will always do so at a rate of one U.S. Dollar ($1) per one (1) USDC and (ii) when Circle redeems USDC for U.S. Dollars, it will always redeem such USDC at a rate of one U.S. Dollar ($1) per one (1) USDC, less fees where applicable.
…For each USDC that is issued by Circle and remains in circulation, Circle will maintain the equivalent of one U.S. Dollar ($1) with its banking partners in Segregated Accounts, on behalf of, and for the benefit of, Users. Circle believes these actions will promote the price stability of USDC with an intended goal of one (1) USDC being worth one U.S .Dollar ($1). However, this does not guarantee that the value of one (1) USDC will always equal one U.S. Dollar ($1). Due to a variety of factors outside of Circle’s control, the value of USDC, particularly on third-party platforms such as cryptocurrency exchange platforms, can fluctuate above or below one U.S. Dollar ($1). Circle cannot control how third parties value USDC, and Circle is not responsible for any losses or other issues that may result from fluctuations in the value of USDC.
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So far the bulk of the flow of funds is in direction from fiat to stable coins.
What will happen when the even a fraction of the flow goes in opposite direction - from stable coins to fiat?!
