> I think they are looking for a "decentralized" solution where the collateral is held by a smart contract.

Problem is that unless the asset is virtual, it's going to actually be held by a legal person in the real world, not the smart contract, and it's not ideal to have a stable coin collateralised only by another virtual asset (although makerdao seems to make it work so far).

I think the main innovations here wouldn't be technical but legal, since good solutions to this problem involve the interface between the real world and the blockchain. I remember reading about a legal structure where real assets were held by a trust for the benefit of the owner of an NFT or something, but I'm sure there are other things you could do with the right legal structure, or possibly a central bank or a jurisdiction like Estonia could come up with something that would engender a lot of confidence.