In the financial environment, pegging has the meaning of tying a currency to another currency. Since the 18th century nations had been pegging currencies to overcome market volatility and stabilize the value of their currencies.

Thus cryptocurrencies can be linked or tied to another medium of exchange such as the fiat currency of a country or gold.

As a result, when pegged cryptocurrencies are established and ratios are determined the value of the cryptocurrency will fluctuate in the same direction as the currency to which it is pegged.

Today most cryptocurrencies are pegged to the US dollar as the American national currency is historically strong and stable. The US dollar currency has been a dominant facet in the global financial sector.