I don't know why I am only finding out about them now... But a platform that does just this exists already 🙈

They are called "Money On Chain" (okay bad name, terrible SEO, for one thing) and they have a stable coin (pegged to US Dollars) that is called "Dollar On Chain" (short: DOC).

To run their smart contracts they use RSK (formerly Rootstock) and you can "mint" your own DOC by first staking BTC into RBTC and then sending the RBTC to the MOC/DOC contract...

[1] https://medium.com/moneyonchain/buying-and-selling-products-with-doc-is-now-possible-928c60dfd029 [2] https://twitter.com/moneyonchainok [3] https://btcmanager.com/defi-bitcoin-money-on-chain-crypto-lending-platform-rootstock/ [4] https://www.defi.win/money-on-chain-a-stable-asset-platform/