It's suppossed to be pegged to the value of one US dollar. It's whole purpose is to be a "stablecoin". When the market overvalues HBD it means that we have miss-allocated demand. That extra demand shold be redirected to Hive instead.

This proposal increases the supply of HBD on the market and reduces the one for Hive. In theory it should bring the value of HBD closer to it's intended price and by reducing the supply of Hive it will contribute to increase it's value.

The higher price of Hive will result in more HBD being payed out for authors. So it is in the best interest of all the stakeholders for this to happen.