How are stablecoins pegged to a fiat currency?
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It seems almost all stablecoins pegged to fiat are pegged to the US dollar, but anyway - how does this pegging work? Are smart contracts used somehow to keep it on par? Is there more to it? Does it happen automatically or do humans or AI intervene? Would prefer an educated answer as opposed to one from somebody who makes some intelligent guesses.
One important difference is of course that a specific country controls it's currency and pegging it to another currency (usually the US dollar). I was reading the different ways a country's government would use to peg it's currency - the simplest being just setting a fixed exchange rate and then a country's government intervening to buy or sell it's own currency to maintain that peg when it becomes necessary. But an entity that has it's own stablecoin doesn't have the same tools right?
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