Pegging is a way of tying cryptocurrencies to fiat currencies. This type of connection allows consumers to use crypto tokens like cash. Many cryptocurrency exchanges use this type of connection to give consumers a stable currency to buy and sell items. Pegging helps users prevent the volatility of crypto token prices, which can make daily payments complicated.
Pegging is a popular method of tying cryptocurrencies to the value of US Dollars. The problem with pegged cryptocurrencies is that they need to hold massive amounts of fiat currencies as reserves. Pegging makes it possible to audit the value of crypto tokens and ensure they are worth the same amount as fiat currencies.
