so backed by and pegged to are interesting concepts that i hadn't really differentiated before.
i assume "backed by" would be the BitBond idea. if i understand correctly this means the Treasury takes on Tether's business model to an extent (but with their treasury bill product, not stable coins).
and "pegged to" would be like an reverse stable coin. the dollars would be pegged to, let's say, 10 satoshis per dollar. that would be an upside-down world
the bulgarian central bank uses a peg, and it was very effective for the last 15 years, the romanian currency, the Leu, i think it was "backed by euros" and it fell by 50% in the same period, 12 years ago the Leu and the Lev were both parity at 50% to the euro
the board that does it in bulgaria basically all they have to do is buy euros to push the price up and sell them to lower it
i think the key difference is that "backed by" means more steps to the same end
when i say "buy and sell" i think that mainly means eurobonds to back their loan issuance, so if it goes up, they close out loans in leva and vice versa
there may be other factors in the fall of the Leu tho, idk, romania's big exports are cars and oil, where bulgaria sells coal, electricity and cheese
also it's notable that bulgaria also had one of the lowest rates of vaccination during the scamdemic, possibly their economy is doing better because people are less sick
serbs and bosnians were also quite hostile to the scam as well
So that's how that works. I did meet a currency trader from SudTirol who said he traded some European currencies. Maybe this is what he was doing, trading the temporary differences until the official bank evened it out.
The Lei is not peged by euro. Only the Lev is
