Back to glossary
Fiat
Fiat money is a form of money that is created and supported by a government or other central organization, such a central bank.
Fiat currency is valued on the faith and goodwill of the government that issues it rather than on a tangible good like gold or silver. The American dollar, the euro, and the Japanese yen are three examples of fiat money.
These currencies can be traded on the foreign exchange market, and market factors like supply and demand influence their value. Fiat money is a common form of trade in most modern economies and can be used to buy and sell products and services as well.