Fiat money
Also known as: fiat currency
- 1Fiat money is not backed by physical assets like gold or silver.
- 2It is authorized by government regulation to serve as legal tender.
- 3The Jamaica Accords of 1976 marked the end of the Bretton Woods system.
- 4Most major global currencies currently operate under a fiat system.
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.
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the primary form of money in modern supply
Modern money supply consists largely of fiat currency, which has no intrinsic value and is not backed by a physical commodity, relying instead on government decree.
Fiat money is a form of currency issued by a government and regulated by a central bank that lacks backing from physical commodities. Unlike historical currencies tied to precious metals like gold or silver, its value is derived primarily from government decree and its status as legal tender.
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 co...Wikimedia Commons; PHGCOM; Own work , photographed at Tokyo Currency Museum; CC BY-SA 3.0; Wikimedia Commons; Wikidata P18 (image)Song dynasty Jiaozi, the world's earliest paper moneyWikimedia Commons: File:Jiao_zi.jpg Since the conclusion of the Bretton Woods system in 1976, following the Jamaica Accords, fiat currency has become the standard for major global economies. This system allows monetary authorities greater flexibility in managing the economy, as the supply of money is not constrained by the physical availability of a specific commodity.