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Simple English definitions for legal terms
fiat money
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A quick definition of fiat money:
Fiat money is the type of money that a government says is valuable and can be used to buy things. It's not backed by gold or silver like some other types of money. You can use fiat money to buy things like food, toys, and clothes. It's also called paper money or flat money.
A more thorough explanation:
Fiat money is a type of currency that is not backed by gold or silver. It is authorized or adopted by a government as part of its currency. This means that the value of fiat money is based on the trust people have in the government that issued it.
- Paper currency issued by the government
- Coins issued by the government
These examples illustrate fiat money because they are not backed by a physical commodity like gold or silver. Instead, their value is based on the trust people have in the government that issued them.