Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
It's just way easier to day trade with Stablecoins.
You don't want to wait 2-3 days to make your moves because you've withdrawn the funds into a bank account and now have to wait for funds to clear back and forth. The crypto markets simply move too fast for that.
As to your concerns with custody, just don't use non 1:1 backed tokens like USDT which employ fractional reserve. USDC/DAI etc. should all be fairly safe to use.