The Celo Reserve does have collateral backing cStables. CeloReserve.org is a good way to track this.
In short, at the current level of BTC, ETH and Celo - the outstanding amount of stables has multiples of collateral - a significant difference to Terra. However, there is no guarantee that stables are safe in all market conditions. There is risk. Personally, I do not hold nor recommend holding any more than a tiny amount of cStables (or any stables for that matter).
What would happen in the case of further drops in crypto price has been the subject of much discussion. See here for some threads:
Generally, my personal view is that Celo has been a lot more conservative than platforms like Terra - both in providing collateral for stables, and having a much slower growth in supply of cStables. Still, there are risks. There are not simple solutions. Mento 2.0 includes plans for some improvements. I continue to see this as a high risk and priority for Celo to address.