Well, since it is from Japan, I think that it'll be successful, not only because the project is made by Bitbank, but to also think that they are very clever and witty about this, Bitcoin loan is very unique, there are lots of theories about it and now they are making it happen, BTC-USD is a great form of loan, hopefully this comes out well.
I don't see it practical as for some of the time period the borrowed Bitcoin will be locked so can't do any activity with it, at least not trade. Those who are thinking that they will borrow on easy terms of BTC-USD pay back for trading purpose, this idea don't worth them. For some of the people like escrow it may work.
But honestly speaking I don't like the idea of paying back into fiat, in both the cases if price goes up or down the only beneficiary will be bitbank.