What difference does it make? Let's say the price of a coin is tied to the cost of one carat of a diamond. Then it will always be stable. This will not attract investors who use the strategy of the holding and will not be interesting for traders. Those who have a lot of money easier to buy diamonds. What is the meaning of such a coin?
That's exactly their selling point.
A less volatile crypto that is backed by "something" and can't experience drops and fluctuations like bitcoin does so it can be used easily in daily transactions without FOMO.
Look how many people are almost afraid to spend coins because by the next day they might double in value.
And to be honest, bitcoin was not from the start an investment or a toy for traders.
But this one is going to turn in a few years in a scam worth of a book and an award winning movie.
It's going to be epic, because it's going to make it much easier and secure to deal with diamonds.
The biggest problem with asset backed currencies is that you need to rely on the source that he really backs up the currency with the asset.
Actually dealing with diamonds is a real pain in the ass.
There is no real liquidity there and if indeed there would be the need to sell massive quantities there would be no market to absorb it in a small time frame.
But you did raise the most important question about this:
Why should we trust these guys and their claims about having those diamonds ?
Tether is denying audits after audits, this one will be no different.