I don't have a crystal ball. It might not happen. But you should act as if it is a foregone conclusion.

The SEC has been itching for an opportunity to rein in crypto and all of those shady supercoders and tax cheats it empowers. A correction in the market, the time when traders are moving back into stablecoins, would be a perfect time to destroy people when they aren't looking.

Fortunately, the tech in crypto (the stuff that fags like Alex Becker and Bitboy make fun of) has advanced to a point to offer a bit of protection. Algorithmic stablecoins outside of the US can't be so easily attacked by the SEC, although they may suffer some of the greater market's consequences.

Centralized shitcoins like USDC are a prime target to collude with the SEC. The company behind USDC, Circle, can be regulated very quickly at any time. I don't claim to know everything about the tech, but I see no reason why the SEC couldn't just tell Circle to freeze USDC until certain actions are taken (everyone in defi KYCs or mainstream crypto just loses all faith in stables). Regulators can't take this action with MIM, UST, MAI and other algorithmic stables, so these may be the stables of choice during this market correction.

USDT is a possible because it has shown resilience to regulation and it is HQ'd outside of the US. I believe in UST because Terra seems to have taken a position as staunchly against being directed by US policy. DAI is recently viable because it no longer relies on USDC as its primary backing. BUSD I'd stay away from. Binance is looking to go public and will bend over to whatever regulators say at this point, including freezing the asset.

If stables don't get attacked, consider it a fortunate event. But in any event, you'll be protected if you diversify into strong algorithmic stables.