It has worked (or at least maintained a pretty narrow band of 96 cents to 104 cents) for nearly 18 months now: https://coinmarketcap.com/currencies/dai/.

I'm also not convinced it will work forever, but it has been remarkably resilient to date, even in the presence of the value of the collateral (ETH) dropping 90+% in that time frame.

Interesting and surprising.

I still don't see much point given that there are now stablecoins pegged exactly to the USD with audited bank reserves.

It's decentralized and censorship resistant. Anything linked to audited bank reserves gets effectively controlled by the governments that regulate the bank.

Stablecoin providers like Gemini and Tether can't really tell what's going on with their coins except at the edges of the network (i.e. people they directly sell to or redeem coins from).

In that sense it's like a regular bank with cash... they know their own customers but they don't know where that cash has been.

With a blockchain there is the potential for tainting coins, but you have to know that a particular address was associated with a crime.

In my view, on the privacy/censorship spectrum, a pegged stablecoin is far closer to cash overall than to PayPay or Venmo.

Regulators kind of have to either accept that reality or ban pegged stablecoins entirely. There isn't really an intermediate option. At this point it seems like the genie is already out of the bottle and they aren't like to ban them entirely.