There are basically two philosophies behind how stablecoins should be made stable
An asset can be worth whatever the issuer deems it to be worth. It is worth $1 because everyone believes it is worth $1.
We all know, however, that most stablecoins are not exactly pegged 1 to 1 with USD as there are always small price fluctuations. Why is that? These coins rely quite a bit on arbitration between assets and exchanges to keep the price equal to $1.
Currently, it works because it works, but essentially it is unbacked and risky for a long-term hold.