1/ "No one will ever borrow in a deflating currency because you pay back more than what you owe in real terms (interest aside)." is as valid as "No one will ever lend in an inflationary currency because you receive back less than what you are owed in real terms (interest aside)."
2/ You can have monetary correction clauses in a loan contract to account for currency depreciation by using any price inflation index. That, btw, continues to be the standard practice in countries that suffered from high or hyperinflation like Brazil.
3/ With a deflating currency, a loan contract would adjust the principal just as in an inflationary environment, by using a (de)inflation index for monetary correction. {fin}
