Fiat refers to currency that has value because a government maintains it and people have faith in its value. Unlike commodities like gold or silver, a fiat currency does not have intrinsic value; its worth is essentially based on trust.
Most of the world’s currencies, like the U.S. dollar or the Euro, are fiat money. They are contrasted with cryptocurrencies and commodity money, which have value due to their scarcity or the value of the material from which they are made.
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