This model was popular when PayPal was banning Bitcoin. At that time, PayPal balance was converted into tokens, and then you could convert the tokens into Bitcoin.
This is an interesting use I did not thought of, thank you for bringing it to the table.
Just to clarify, the idea of this flatcoin concept is not to be a Bitcoin replacement, nor a proxy token. It's purpose is to allow for a stable transition regarding volatility. A flatcoin can be a mean for the mass of people to migrate to bitcoin by avoiding both fiat inflation and bitcoin volatility.