Oracles, Stablecoin

Would it be possible with the addition of oracles to use these to monitor exchange rates and couple such oracles with a smart contract that implemented one or more stable coins?

A smart contract its simplest form could simply increase supply or decrease it based on external data. It would not need to be based on fiat currency.

I apologize in advance if this sort of idea has been discussed extensively in forums I have not seen. I am still relatively new.