> the forked chain would have no legitimacy with users either and they would be quick to dump the issuer's stable coins as quick as possible.
Wouldn't it have legitimacy with the actual fiat banking system though? TBH thats the side i'd personally pick if i owned significant eg USDC and it was only honored on one side of the fork.
Sure, but users don't have to pick. They could choose to recognize their eth on one chain and USDC on the other, just long enough to cash out their USDC for real USD from the forked chain (as long as Circle/Coinbase has liquidity to do so). At that point the user would be free to use a different stable coin if they chose.
Wouldn't it have legitimacy with the actual fiat banking system though? TBH thats the side i'd personally pick if i owned significant eg USDC and it was only honored on one side of the fork.