Stablecoins were constructed to dampen volatility of crypto-currencies. Companies that issue one type of stablecoin do this by creating a reserve of fiat currency, a 1:1 peg to the underlying fiat. In this type of stablecoin, the volatility that should remain is the volatility of the fiat itself. The market cap for stablecoins as of a few days ago was $20 billion. This is a three-fold increase from the start of the year.
Why should anyone put any money into stablecoins when they can hold dollars or euros or pounds? There are two reasons, one is that the stablecoins are native on public blockchains; crypto-currency traders can easily move BTC, ETH, or any other kind of crypto-currency into a stablecoin shelter during periods of high volatility in cryptocurrency. The second reason involves lower KYC burdens during these conversions which allow the holding of