Fiat Currency

What is Fiat Currency?

Fiat Currency is a government-issued currency that is not backed by a commodity such as gold.

(Most modern paper currencies, such as the U.S. dollar, are fiat currencies)

Because central banks can control how much fiat money is printed, it gives them greater control over the economy.

One danger of this system is that governments can print too much, resulting in hyperinflation.