Fiat CurrencyBack to Glossary
Fiat currency, or fiat money, takes its name from the Latin word ‘fiat’, which translates to ‘it shall be’. It refers to currencies issued by governments and deemed to be legal tender on a ‘because we say so’ basis. In other words, fiat money is not backed by anything tangible, like gold or silver (as it used to be), but rather, by the collective trust that we place in our national governments.
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