| paper currency made legal tender by a fiat of the government, but not based on or convertible into coin. |
| fiat money n. Legal tender, especially paper currency, authorized by a government but not based on or convertible into gold or silver. |
Fiat Money
Money that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves.
Investopedia Commentary
Most of the world's paper money is fiat money.
Related Links
What Is Money?
See also: Currency, Gold Standard, Money, Money Market, Seigniorage
