I've often wondered about this conundrum: how can a lender take btc as collateral and allow the owner to retain control of it. I wouldn't loan someone money on a promise they'll hold the collateral and hand it over if needed. Seems to me that a smart contract escrow is the only solution and that has its own issues.

Regarding the idea of fixing the money, that's the ultimate goal. (This scenario involves using real money BTC as collateral for paper money fiat.)

Regarding usury, that's bad of course. The lender does deserve some interest, some gain for taking on the risk of giving the loan. But then, even with "usury", I think, well if the person agreed to take a loan at say 20% interest, they agreed to that price for the money. If they did not agree to it, they would not take the loan in the first place. Just some thoughts.