Fiat Currency
Government-issued money like USD, EUR, or GBP that is not backed by a physical commodity.
Explained Simply
Fiat currency is money that a government declares as legal tender. The US dollar, euro, and Japanese yen are all fiat currencies. Unlike gold-backed money, fiat currencies derive value from government authority and public trust. In crypto, 'fiat' is used to distinguish traditional currencies from cryptocurrencies. Most people enter crypto by converting fiat to crypto through exchanges. Stablecoins like USDC and USDT are crypto tokens pegged to fiat currencies.
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