> A currency peggged to an underlying doesnt mean you need to hold all the underlying. You just need to intervene in the market when your target price rises or

> A currency peggged to an underlying doesnt mean you need to hold all the underlying. You just need to intervene in the market when your target price rises or falls to much Which works great until it doesn't, and then it gets costly: https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday Tether claims to avoid the problem by literally holding a dollar in cash for every tether it has minted, so it can't be attacked- no matter how many people try to sell Tether, it can always buy up all the outstanding Tether with dollars and maintain it at parity. It's hard to tell the difference until the company runs out of money, and then the currency collapses all at once.