Couldn’t a government just destroy a stable coin by seizing the currency backing it? Isn’t the point of a cryptocurrency supposed to be that it’s not controlled by any government?
I don’t know if a government today could just seize crypto, but the USA did so with gold in the past. Imagine owning a whole bunch of gold, and then waking up one morning & finding out it’d been replaced with US Dollars.
A stable coin doesn’t necessarily have to be backed by fiat, DAI is backed by crypto assets and those assets can fluctuate and sometimes need to be increased during volatility.
I think the point of fiat backed stable coins are more for getting around regulations (eg Tether) and a fiat on-ramp for getting into the ecosystem. Certainly if the government seized a large portion of Tethers assets then that could affect other assets, but this actually has already happened with (a small portion, not large) Tether and nothing catastrophic happened.
https://en.wikipedia.org/wiki/Executive_Order_6102