What is FIAT money?
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Fiat money is a type of currency not backed by a physical commodity but by government regulation and societal trust, is a cornerstone of contemporary economies. Managed by central banks, it allows for flexibility in monetary policy, enabling adjustments to support economic stability and growth.
It's all the kinds of paper money that everyone agrees has value, like EUR & USD. This paper isn't actually valuable because it's made of something rare like gold or silver, it's valuable simply because everyone believes it is. That's fiat money.
Governments create and regulate fiat money. They print bills or mint coins and declare them to be worth a certain amount. People use this money to buy things and pay for services because they trust that others will also accept it as payment.
Unlike money backed by gold or other assets, fiat money's value isn't tied to anything physical. Instead, it relies on the stability and trust in the government issuing it and the economy it represents.
FIAT money is represented on blockchain by .