Any money declared by a government to be legal tender.
State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. Intrinsically valueless money used as money because of government decree.
An intrinsically useless object that serves as a medium of exchange, i. This can support the smooth functioning of the economy.
Fiat money — brief history China Fiat money dates back to 11th-century China. Its use was widespread during the Ming and Yuan dynasties.
In Spain, during the conquest of Granadathe authorities issued paper money as an emergency measure. The Bank of Stockholm in Sweden issued the first regular paper money in the West in However, bythe fiat money had devalued so badly that Sweden returned to the silver standard.
The Americas New France, today part of Canada, began issuing paper money in Bills of credit were an early form of fiat currency.
United Kingdom The United Kingdom abandoned the gold standard ini. United States However, the United States still pegged its currency to gold for several years. It was not until that the US turned the dollar into a complete fiat currency. Video — Examples of fiat money is fiat money?