How is anyone allowed to make their own USD (or any forms of fiat for that matter) of any currency?
Is there a method for doing this?
You can also create one if you are willing to. That's the benefit and risk of decentralized economy at the same time! Here is a comprehensive guide for you to refer,
https://hackernoon.com/how-to-create-your-own-cryptocurrency-tips-to-get-started-947ba92f79f9Couldn't i just create a ERC-20 token and mint myself 1B tokens and use that to buy up the coins in circulation if i wanted to?
How would you get it on exchanges or let people use it as a USD Pair?
No you can't do that unless you promote that coin actively and you get a group of people who believes in your coin. Otherwise your coin will have no value and you will end up billions of dead coin.
There's no shortcut available to become a billionaire!