It is not a direct peg, but It is a mechanism that Will increase the downward force.
If implemented, the downward pressure Will be a lot bigger than the upward, wich Will drive the price down at a fast rate.
What may happen then is that the upward mechanism below 1 dollar (interest and SBD destruction) might not have a fast effect, and we may end with a Very devaluated currency.
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Hard to say, really. I do think that the peg will work because the incentives are there. It is much easier to support from below in any case.
It might cause instability in steem price though, which is what I'm concerned about.