The only way it can work is the way it works now, except in a more decentralised way. For a glimpse of the future, look at Bitshares.

There is always a demand for 2 types of assets:

[1] - risk assets
[2] - stable currency

They are opposites in the sense that people investing in risk assets don't WANT them to stay stable against the value of goods, services or currency, the want them to go up (if they are long) or down (if they are short).

On the other hand, the retail environment has a demand for a stable currency.

What banking does (in a centralised way) and a system like Bitshares does ( in a decentralised way) is match these two requirements up so that they compliment each other in the marketplace. Those investors who want to go long risk assets (BTS, in the case of Bitshares, or Bitcoin or Dash) and short stable currency's put up their holdings as collateral to borrow new currency into existence. This does 2 things:

[1] - satisfies their market requirement for holding an asset that potentially grows in value
[2] - satisfies the trade market requirement for a stable currency with an elastic supply that provide new liquidity as the economy grows

The risk-asset holders then sell that new currency (that they borrowed into existence using their collateral) into the market, normally choosing themselves an entry point when the currency is off its "peg". Doing that helps the currency return to its peg and makes the risk asset holder money at the same time.

In this way, the market holds the collateralised asset (currency in this example) to a stable peg and if the economy grows, (i.e. requires increasing amounts of stable currency liquidity) then the value of the underlying asset will continue to increase. Both interests are therefore satisfied - the risk asset holders and the stable currency demanders.