Fiat Currency

A fiat currency is any type of government-issued currency that is accepted as legal tender by the citizens of a specific nation, government, or region. Fiat currency is not backed by a physical commodity (such as gold or silver), but rather by the government that issued it. It serves as a medium of exchange, a store of value, and a unit of account as a government-regulated instrument. Money must be durable, portable, divisible, uniform, acceptable, and limited in supply in order to function as fiat. The majority of modern paper currencies, such as the EU euro, Japanese yen, and US dollar, are fiat currencies.