Fiat-Pegged Cryptocurrency
Definition
Fiat-pegged cryptocurrencies offer a solution that combines the traditional financial system with the world of cryptocurrencies and especially for investors who want to protect themselves from exchange rate fluctuations.
Fiat-Pegged Cryptocurrency is cryptocurrency that is usually pegged or pegged to a specific fiat currency (for example, the US dollar or Euro). These types of cryptocurrencies are usually backed or managed by a central authority to ensure price stability or peg to a certain value. For this reason, a fiat-pegged cryptocurrency is often popular as an option for users who want to hedge against exchange rate fluctuations or who want to combine the world of cryptocurrency with the traditional financial system. For example, 1 USDT (Tether) is usually pegged to 1 US dollar and therefore its price is equalized to the dollar.
This entry is part of the JrKripto crypto glossary. We explain key terms and concepts to help investors and traders understand the cryptocurrency market. Clear definitions support better decision-making and risk management.
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The JrKripto crypto glossary explains important terms and concepts so investors can understand the market better. Clear definitions support decision-making and risk management. Each entry has a short definition and, where useful, an extended explanation for quick reference or deeper reading.
The glossary covers a wide range of topics from trading and DeFi terms to blockchain infrastructure and market indicators. You can find terms via search or the term list. Use the related terms section to discover related concepts.
