How Stablecoins Maintain Their Peg

February 16, 2026 stablecoins education

Mechanisms behind USD stablecoins and how they keep the $1 price.

Mechanisms

Reserve backing
Redemption systems
Market arbitrage

If token trades at $0.98:

arbitrage traders buy cheap
redeem at $1
peg restores

Peg stability depends on trust and liquidity.