fiat money

(redirected from Fiat Currencies)
Also found in: Dictionary, Thesaurus, Financial.

fiat money

(fī`ət, fī`ăt), inconvertible money that is made legal tender by the decree, or fiat, of the government but that is not covered by a specie reserve. It is commonly understood to be of paper, although it may also consist of overvalued metal coins. The circulation of fiat money may lead to inflation, whereas money redeemable in gold or other securities is held much less likely to do so. Under conditions of proper monetary management, however, fiat paper money can be a stable currency. In fact, contemporary American money is essentially fiat money. All Federal Reserve notes and most circulating coins are money because the government says they are, not because they are backed by precious metals. Earlier, less stable examples of fiat paper money were the continentals issued by the American government during the Revolutionary War, the assignats issued during the French Revolution, and the greenbacks issued by the U.S. government during the Civil War. Most such issues were accompanied by severe price rises.

Bibliography

See W. C. Mitchell, History of the Greenbacks (1903, repr. 1960); F. Reinfeld, Story of Paper Money (rev. ed. 1960).

References in periodicals archive ?
However, cryptocurrencies resemble fiat currencies from the aspect that in and of itself, it has no intrinsic value, rather, something extrinsic is giving it value.
Rather, the value of fiat currencies, such as the US dollar is used to determine the value of Bitcoin.
It appears that crypto-currencies that have fixed exchange rates to fiat currencies are a better unit of account, medium of exchange and store of value than crypto-currencies which do not have fixed exchange rates to cash.
Cryptocurrencies have no intrinsic value, whereas fiat currencies certainly do, because they can be used to pay taxes.
One of the main concerns voiced by other central banks looking at digital fiat currencies is that they could undermine the commercial banking system by making it possible for anyone to have an account with the central bank.
Its primary finding was that the price impact of speculators in virtual currencies adversely affects their property as a medium of exchange and renders a crowding out of existing fiat currencies, such as the US dollar, unlikely.
Among alternatives for a standard of value that are not themselves floating fiat currencies, or otherwise subject to the daily whims of human managers and the tendency of fiat currencies to suffer a disastrous demise, there is really only one option--gold.
The price had dropped 8% overnight, a change inconceivable in other fiat currencies.
While fiat currencies function well as a medium of exchange and a unit of account, they fail miserably as a store of value.
However, the drivers are the same - the debasement of fiat currencies as a store of value and fear over the outlook for the global economy."
"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency." The new UN report said that the IMF should be given the authority to print its own fiat currency, claiming that the new system "must not be based on a single currency or even multiple national currencies but instead, should permit the emission of international liquidity--such as [Special Drawing Rights]--to create a more stable global financial system." SDRs are "assets" issued by the IMF with a value currently based on multiple national fiat currencies.
This development will assist NYNJA in powering its distributed labor marketplace, allowing businesses to have real-time access to thousands of remote workers, including the ability to pay freelancers with crypto and fiat currencies.