Glossary · Assets

What is Fiat peg?

A fiat peg is a commitment to hold a token's price to a national currency: one token, one unit, maintained by reserves and redemption. The peg turns a currency's stability into a blockchain property, which is why every major currency now has tokens tracking it.

Pegs differ in discipline: reserve-backed stablecoins redeem on demand; algorithmic schemes (the ones that failed) relied on incentives. The listed question on U.CASH is always who redeems, for what, under whose regulator.

How Fiat peg works

A fiat peg is the commitment that one token unit exchanges for one unit of a national currency. The mechanism is redemption: the issuer accepts tokens and pays currency, and mints tokens against currency deposits. Any market drift from par creates an arbitrage that pushes the price back, which is why pegged tokens spend their lives within basis points of their target.

Pegs differ in what sits behind them: bank deposits, short-term treasuries, or a currency pool. The peg's quality is the reserve's quality, and the reserve's transparency is the thing to check before relying on one at scale.

A peg also defines the token's failure mode, which is worth naming plainly. If redemption halts or reserves prove smaller than supply, the token does not gracefully devalue like a floating asset; it breaks its promise, and price discovery gets disorderly. This is why reserve transparency and redemption access are the two facts to verify before holding any pegged token at size.

Fiat peg in practice

A EUR-pegged token redeems one-for-one against euros in a European account. A merchant invoicing in euros receives it, prices it at par, and reconciles it like a euro receipt, with the token's explorer entry as the audit trail.

Fiat peg on U.CASH

Nineteen currencies have pegged tokens on U.CASH, from the dollar's ten to single-issuer currencies like TRYB and ZARsc. Every currency page lists its pegs with issuers; every asset page names the regulator.

The peg decides which currency a checkout behaves like. Pick the peg that matches the invoice and the accounting question collapses: a JPY-pegged receipt reconciles as yen, not as a crypto position needing a price at recognition. One more operational note for merchants: pegs denominated in exotic currencies often have thinner liquidity than their USD counterparts, which means larger tickets can move the price during the swap. The preview quotes the real number before signing, so the cost is always visible, but pricing a large NGN-pegged receipt is a different exercise from pricing the same in USDT. Splitting large conversions or timing them during the peg currency's banking hours keeps spreads honest. The currency pages list which pegs serve each market so the choice is informed rather than accidental.

Related assets terms

StablecoinTokenized stockPre-IPO token

See also

Currencies and pegsStablecoin

Fiat peg: FAQ

How is a peg enforced?
By redemption: holders who can always exchange one token for one unit of the currency with the issuer make arbitrage defend the price. Reserves and regulatory oversight keep the promise credible.
Why does a currency page matter if I settle in crypto?
Because the peg is the bridge: pricing in a currency, settling in its token, no FX step. The currency pages map which rails and which tokens meet on one checkout.
Who keeps the peg at exactly one?
Arbitrage against redemption. If the token trades under par, buyers redeem for the full unit; over par, minters sell new units. The loop keeps market price within a whisker of par.
Do all pegs hold the same quality?
No. The reserve composition and its attestations differ by issuer. Token pages link the issuer's reserve documentation so the backing can be checked directly.
How many fiat pegs trade on U.CASH?
Thirteen families across 25 tokens: USD, EUR, and Mexican peso with multiple members, plus single-token pegs for nine further currencies and the gold and silver pair.
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