I do not currently think trustless lending for USD or a stablecoin is possible on bitcoin. How do you plan to accomplish it?

I will note that Tony Klausing's "stable channels" project lets you opt into a USD "hedging" strategy on bitcoin where your counterparty can't steal your money, but they can just stop participating in the contract at any time. Since hedging is a form of "shorting," the other side of the trade is essentially "going long" on bitcoin, which is equivalent to taking out a USD-based loan and buying bitcoin with it.