fiat money
currency established as money by government regulation or law
AI overview
Fiat money is currency that a government declares to be legal tender, rather than money backed by a physical commodity like gold. It matters because most modern economies rely on this system, which gives governments the ability to manage their money supply and conduct monetary policy.
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Article
Yuan dynasty banknotes are a medieval form of fiat money. This banknote has a value of èr guàn (貳貫) printed on it, where 貳 is the version of the word "two" used in financial writing, and 貫 is a unit of measure called a string of cash coins. Directly under the words "貳貫" are a picture of 2 circular strings of cash coins, visually depicting the physical currency value represented by this banknote.
Fiat money or fiat currency is a type of government-issued currency, generally created by a central bank, authorized by government regulation to be legal tender but not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. Since the end of the Bretton Woods system in 1976 by the Jamaica Accords, all the major government currencies in the world are fiat money.