Fiat Money

Fiat Money

Fiat money is money (currency, legal tender, means of payment, store of value) that, since countries came off the gold standard, has no intrinsic value. It is money created by government fiat. Fiat money is inherently volatile. Its value as a medium of exchange is maintained either by governments (which can print money or reduce money supply through market intervention) and by money counterparties based on the laws of demand and supply – backed by faith and confidence in the issuing government.

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