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Fiat-Pegged Cryptocurrency

Also called, “pegged cryptocurrency,” a “Fiat-Pegged Cryptocurrency” pertains to a coin, a token, or a digital asset that has been issued on a blockchain linked to a government. The asset may also be a bank-issued currency. Pegged cryptocurrencies are constantly guaranteed of the specific cash value in reserves.

There are cryptocurrencies that are pegged to an underlying asset. One such example is the USD Coin (USDC), a stablecoin issued by Coinbase. The USDC token is issued for every $1 that is stored in Coinbase’s reserve. A cryptocurrency that is pegged may be linked to any asset and then duly issued on a blockchain. A cryptocurrency can be considered a pegged cryptocurrency should it remain redeemable for an underlying asset.

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