A government-issued currency that is considered legal tender in a specific jurisdiction.
Fiat currency can include both physical banknotes/coins as well as electronic reserves made available to financial institutions with a reserve account at the central bank.
Fiat currency is fully backed by the government that issues it and is not backed by another commodity such as gold.
This is the classic currency as we know it. The term fiat derives from the Latin word fiat, meaning “let it be done” used in the sense of an order, decree or resolution.
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.