No, stable coins don't have to be exchanged for cash you can send them directly to people or swapped. Much easier to move than digital fiat rails. They have no privacy or anonymity, but most people don't care about that 🤷‍♂️ They are pegged to $1 USD so are very popular in the global south in countries in Asia, Africa, South America, etc. because their local fiat currencies are much worse in comparison.

You can also use them to "lock-in" your bull market gains if you're a trader and expecting your shitcoins are going to crash soon.

Most stables are permissioned and centralized; USDT/USDC your transactions can be frozen. It is still pretty rare occurrence but becoming more frequent. DAI is the only major one that is permissionless if you use it on ETH.

Another big problem is USDT and USDC collateral cannot be audited by anyone and supply is centralized. Tether can arbitrarily print new stable coins on a whim. People using them just have to take their word that they are good for it. Obviously I have no trust in them at all, but I can understand why some people find them useful in the short term for certain things.