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?
Couldn'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?
You could, but why would anyone trust in the value of your token?
It would require some actual legal backing as well as audited reserves for anyone to believe in your stablecoin. It's quite industry standard when you look at coins such as Tether, even with all the audits and stuff still being questioned by the community about their legitimacy.
Anyone can create a ERC20 token, but not everyone can back their token with USD.