More Examples
“Fiat currency has historically been vulnerable to debasement.”
“There’s hard money, like bitcoin or gold… and then there’s fiat currency.”
“Most modern economic theory is centered around fiat terms and concepts.”
Definition(s) from the Web
- Fiat Currency is the default currency of Nation States and the currency they take in taxes. Source
- The fiduciary or fiat money definition is money, unsecured with gold and other precious metals. The nominal value of fiat money is established and guaranteed by its issuer – government and is chosen regardless of the cost of the material used for its manufacture. Fiat money almost always acts as a means of payment on the basis of state laws that demand to accept it at face value. The value of fiat money is largely connected to the people’s belief that it will be possible to exchange it for anything of value. The decline in the authority of the issuing government leads to a decrease in the purchasing power of fiduciary money – inflation, and attempts to preserve their purchasing power through investments. Not all government-issued currencies are fiat money. The term “fiat money” defines only such currencies that don’t have intrinsic value in their material form equal to their declared price. However, some authors and financial entities also use the term to refer to any money defined as legal tender, any intrinsically useless thing that somehow becomes a popular medium of exchange and so on. Fiat money is an opposed term to the commodity money. Commodity money is valued in accordance with the material that was used to manufacture it. Fiat money vs commodity money provides more flexible price generation, easier transportation and issuance. However, commodity money is much more stable way to store value as it is almost not volatile. On the other side, fiat money is very useful in successful states as its price grows along with the economy of the respective state and the people’s confidence in their money’s price. Source
- Fiat money is a currency (a medium of exchange) established as money, often by government regulation. Fiat money does not have intrinsic value and does not have use value (inherent utility, such as a cow or beaver pelt might have). It has value only because a government maintains its value, or because parties engaging in exchange agree on its value. It was introduced as an alternative to commodity money (a medium which has its own intrinsic value) and representative money (money which represents something with intrinsic value). Representative money is similar to fiat money, but it represents a claim on a commodity (which can be redeemed to a greater or lesser extent). Government-issued fiat money banknotes were used first during the 11th century in China. Fiat money started to predominate during the 20th century. Since President Nixon’s decision to decouple the US dollar from gold in 1971, a system of national fiat currencies has been used globally. Source
