[dnadler]

That's not a great analogy, you can't redeem currency at a bank.

My understanding is that stable coins are stable because they claim to be backed 1:1 by some other currency. If they are not actually doing that, then thats a fraudulent statement, isnt it?

[CryptoPunk]

Not all stablecoins claim redeemability for USD. Some claim each unit's redeemability for an amount of some digital asset that is worth 1 USD, with the amount redeemed fluctuating in proportion to the value of the digital asset, to maintain the stable value.

[Nasrudith]

And all of the incentives are set up for the maintainer to take the money and run. Excessive ammounts of idle money is an attractive nuisance.