Btw, not only sovereign nations have these issues. Your bank also tries to maintain a peg between one dollar in its account books and one dollar in government money. Similar (but more roundabout) for things like Amazon gift cards.
For a country without an established, credible central bank a currency board can be a big economic improvement over trying to issue their own native fiat currency.
(Even better from an economic point of view is for the country not to issue a government currency at all, but let the market handle that.
When the government is particularly inept, you can see the (black) market trying to fix currency issues even when the government actively tries to prevent that.)
Btw, not only sovereign nations have these issues. Your bank also tries to maintain a peg between one dollar in its account books and one dollar in government money. Similar (but more roundabout) for things like Amazon gift cards.
For a country without an established, credible central bank a currency board can be a big economic improvement over trying to issue their own native fiat currency.
(Even better from an economic point of view is for the country not to issue a government currency at all, but let the market handle that.
When the government is particularly inept, you can see the (black) market trying to fix currency issues even when the government actively tries to prevent that.)