On a philosophical level I hold fiat backed stablecoins in low regard. Another abstraction on debt based money tied into a growth and debt issuance cycle that is just insane.
Putting that aside, the ones that are backed 1:1 by fiat funds held in a treasury bank account and redeemable for the underlying asset (fiat) will serve an immediate market need, more so in crypto exchange contexts. Paying for crypto at a broker or exchange with fiat from a bank account has slow (perceived) turn around time. In Australia, even with the “New Payments Platform” there are delays. People want to take action on price movements and arbitrage, fast. Even more so for programmatic/algorithmic trading. Stablecoins will offer crypto/fiat pairings and trading between with much lower friction.
If you are wanting to hold some of your capital in a token that is “stable” (relative to and collateralised with fiat), and quickly trade it for other cryptoassets on centralised or decentralised exchanges it does make sense.
I’ve led some of the work for an AUD backed stablecoin at btrade.io which is planned for release early next year. Some of the benefits are there really because the fiat banking infrastructure is just so slow and archaic.
There is definitely demand. Be that from bit traders and remittance providers all the way through to dAPP projects and neo banks. Challenges are there also. Traditional banking relationships, slower moving API based banking, privacy issues, key management, financial censorship and surveillance, and then transparency to the public on verifiable treasury audits just to reference a few. This is just the fiat-collateralised stablecoins with funds held in a treasury bank account. Then there is the whole other world of crypto-collateralised and non-collateralised stablecoins that is interesting to watch evolve as well.