That means the price theoretically can't fall below that price (because if the value was below the fixed ratio people would just not trade the coin but instead sell it back).

They also pay out the coin in exchange for real money at the same value, which stabilizes the coin against raising in price.

This promise usually only holds until people withdraw too much and it turns out the company doesn't actually have the financial backing they claim to have.

But in theory stablecoins are closer to paypal credit than to bitcoin. You can exchange €1 in cash for €1 in paypal credit and you can exchange €1 in paypal credit for €1 in cash. So the value of paypal credit doesn't go up or down.

Bitcoin has no such promise. Bitcoins are just traded between users, so the value can go up or down. So if you are lucky you get rich, and if you are unlucky you end up broke. That's why Bitcoin and similar crypto works OK as a kind of large scale online casino, but not exactly as a currency that you want to receive your wages in.

But as with any crypto, stable coins are also worthless crap backed by some randos that you have to blindly trust.

Would you put your money into a "bank" account of a "bank" managed by an anonymous guy who swears he's legit?