Why I’m not worried about centralized stable coins, and why they will be good for Ethereum
I know some folks think centralized stable coins are the devil, and yes, they sort of suck. The owner of the smart contract can basically do whatever they want to your coins. They sort of take the "decentralized" out of "decentralized finance." But consider that most people aren't going to use stable coins as an actual Store of Value (SoV)- especially with those kinds of characteristics. They're going to buy just enough to perform an economic transaction on Ethereum in stable value, and then exit it back out to their bank account, or perhaps keep some available as a Medium of Exchange (MoE).
But to me, what's important is that these stable coins will help to bring more commerce to Ethereum, and more value collateralized on the network. The confidence of real USD backing these coins is going to be what is needed to get some legacy types off of the sidelines and into the game.
So are these centralized stablecoins going to kill alternatives that are actually decentralized, like Maker Dai? I don't think so. There is going to be plenty of demand for a stablecoin that can't be frozen at will by a third party. Separately, what I find fascinating about Dai is that it can do exceptionally well even if it is never used as the stable coin of choice- simply because of the ability to borrow against your ETH.
Now could stable coins (including Dai) usurp economic activity that might have otherwise been denominated in ETH-terms? I think the answer here is yes; however, I don't think we should view this as a binary situation (i.e., it's all got to be stable coins or it's all got to be ETH). I think ETH will continue to be a very popular MoE, and will become an even more popular SoV over time (especially under Proof of Stake with reduced or negative inflation). And remember: stable coins are going to bring more economic activity to Ethereum, which is a very good thing for Ethereum and ETH overall. Also, I do think you'll start to see vendors / dapps on Ethereum price things in floating ETH terms though (allowing for ETH prices of say a digital good to float, based upon the current USD value). Why? Because this movement is global, and everyone needs some ETH to participate. You can be pretty sure your users will have ETH, but you can't necessarily be sure they'll have any other token in their wallet.
In short, I'm not worried about stable coins centralizing all economic activity and taking over the banking / money layer on Ethereum. They're just another way to participate, with substantial drawbacks that are not going to be attractive to many people. Many will prefer to transact in Ethereum, or other properly decentralized currencies.
I don't know if we'll see the deprecation of the USD from its status as the world's de facto currency during my lifetime, but given geopolitical trends, I think we can expect to see major shifts here in the next 20 years. These shifts could potentially make it less important to transact in USD-terms globally, and open the door for thinking about the prices of goods in IMF SDR-terms, or perhaps even ETH-terms or BTC-terms.