Unbacked stablecoins should be illegal. Because why should it be allowed to provide such a crap and have no insurance?
Every distributir of stablecoins should prove a backing of such stablecoins.
I fit is a 1-Dollar stablecoin, it needs tob e backed by 1 dollar.
If it‘ not backed, it should not be allowed tob e traded because it is huge risk for boyers in case it is getting hacked or collapsing.
For our coins to be safe, we need to avoid unbacked stable coins because of risk.
This illegal part is a little bit of a question mark because how are you going to make something illegal that has no central figure? I mean you can't make the "team" of it stop it, after all there is a reason why it's called decentralized and if it's decentralized that means they have no power over it at all, and that's the most important part of it. I believe that we need to consider the situation to be a little risky for governments to make it illegal in the end.
We should consider the situation to be a lot worse, like make it in a way that it will take some time for people to realize what's right and what's wrong. They can make it in a way where using it is illegal, but it's crypto so it would be hard for it to be illegal, you would need to catch every single person, that's difficult.