Pegged Currency
Refers to the currencies which are linked to a specific (usually government-backed) asset in terms of their price.
For example, USDT is pegged to the USD and is always valued at $1.
In a sentence
The stablecoin is a pegged currency designed to track the US dollar.
- The stablecoin is a pegged currency designed to track the US dollar.
- Maintaining a peg requires a mechanism that keeps the asset near its reference value.
- The pegged currency traded below one dollar during a period of market stress.
- Reserve assets supported confidence in the currency’s stated peg.
- Arbitrage traders bought the pegged currency when it fell below its target price.
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