Stablecoins function perfectly until they don't. The others aren't immune to this kind of failure, though they may be more resistant. Once they become unpegged, you can get a "run on the bank", since there's no insurance to protect investors.
Imagine the people in the 1920s that were like “you know what would be funny… what if we got the government to add confidence to our private business with public money and then we get all the customers and skim a little bit from them at every turn, I know I know its dumb but that would be funny right”
