Fiat-Pegged Cryptocurrency

Fiat-pegged cryptocurrency is a type of digital currency that is linked to an authority or bank-issued currency. This type of cryptocurrency is often referred to as stablecoins because they are designed to maintain a stable value relative to the currency they are pegged to. Fiat-pegged cryptocurrencies are issued on a blockchain and can be pegged to any asset. For example, the USD Coin (USDC) is a stablecoin by Coinbase that is pegged to the US dollar. 

Fiat-pegged cryptocurrencies are not backed by a physical commodity, but rather by the currency they are pegged to. The value of a fiat-pegged cryptocurrency is based on the faith and credit of the government or authority that issued the currency it is pegged to. Fiat-pegged cryptocurrencies are designed to provide stability and reduce volatility in the cryptocurrency market. They are often used as a store of value and for transactions that require a stable currency.

While fiat-pegged cryptocurrencies offer stability, they are not without their drawbacks. The value of a fiat-pegged cryptocurrency is still subject to inflationary pressures and other economic factors that can affect the value of the currency it is pegged to. Additionally, the value of a fiat-pegged cryptocurrency is only as good as the currency it is pegged to. If the currency it is pegged to loses value, the fiat-pegged cryptocurrency will also lose value.