What is fiat money?

[ankita]

I keep hearing the term “fiat money” in discussions about economics and cryptocurrency. What is fiat money?
How is it different from money backed by gold or other physical assets?

 

[kuldeep]

Fiat money is money that has value not because it is backed by a tangible asset like gold or silver, but rather because a government has declared it to be legal tender. Government regulation and trust are the sources of its value. The US dollar, the euro, and the yen are a few examples. Today, fiat money is used in the majority of modern economies.

 

[Daxton]

Fiat money is currency issued by a government that has value because people trust and accept it, not because it’s backed by gold or other commodities. Its worth comes from legal authority, public confidence, and its use for buying goods, services, and paying taxes.

 

[Thaddeus]

Fiat money is a type of currency that has value because a government declares it legal tender, not because it is backed by physical commodities like gold or silver. Its value is based on public trust and government regulation. Examples include the US Dollar, Indian Rupee, Euro, and Pound.

 

[Sophie]

The Fiat money is money given out by a government that has a value through the trust and acceptance of people, not because it is guaranteed by tangible assets such as gold or silver.