They are pegged against the dollar, meaning that the bank agrees to buy it back for what they paid for it. So basically, the issuer is taking out a zero intere

They are pegged against the dollar, meaning that the bank agrees to buy it back for what they paid for it. So basically, the issuer is taking out a zero interest loan from the users of the currency. Not a bad deal considering that the bank doesn't have to do any of the work involved in their typical source of zero-interest money (checking accounts).