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fiat

noun

/ˈfiːat/

IPA:

Dictionary definition of fiat

A government issued currency that is not backed by a physical commodity, such as gold or silver, rather by the government that issued it.
"She was skeptical of fiat currency, preferring to invest in gold."

Detailed meaning of fiat

The value of fiat currency is determined by supply and demand in the market, as well as the stability and strength of the issuing government. Fiat money is a legal tender, meaning it must be accepted as a form of payment when offered in payment of a debt. Fiat money has been used throughout history, but it became more prevalent in the 20th century as governments moved away from the gold standard. Fiat currency can be in the form of physical notes and coins or digital money, such as electronic funds transfer.

Example sentences containing fiat

1. The economy relies on the stability of the fiat currency.
2. The central bank manages the nation's fiat money supply.
3. Inflation can erode the value of a fiat currency.
4. The government has the authority to issue fiat money.
5. Fiat currencies are widely used in the modern world.
6. The exchange rate determines the value of fiat money.

History and etymology of fiat

The noun 'fiat' has its etymological roots in Latin. It originates from the Latin word 'fiat,' which is the third person singular present subjunctive form of the verb 'fiare,' meaning 'to become' or 'to be made.' In this context, 'fiat' essentially meant 'let it be done' or 'let it become.' Over time, the term 'fiat' transitioned into English with a specific financial connotation, referring to government-issued currency that is not backed by a physical commodity like gold or silver but rather derives its value from the trust and authority of the government that issued it. The etymology of 'fiat' effectively encapsulates the idea that the value of such currency is established solely by decree or authority, highlighting its role as a medium of exchange based on government declaration.

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Further usage examples of fiat

1. Hyperinflation can lead to the devaluation of fiat currency.
2. Digital wallets store fiat currency electronically.
3. Fiat money is legal tender for all transactions.
4. The transition from barter to fiat currency was significant.
5. The stability of fiat money is essential for the economy.
6. Central banks monitor the supply of fiat currency.
7. Fiat currency is not backed by a physical asset.
8. International trade often involves multiple fiat currencies.
9. The value of fiat money can fluctuate over time.
10. Economic stability is closely tied to the value of fiat currency.
11. Fiat money has replaced many traditional forms of currency.
12. Governments can regulate the circulation of fiat currency.
13. Fiat money is accepted as payment for goods and services.
14. The concept of fiat currency has a long history in economics.
15. He traded in his dollars for fiat currency before his trip abroad.
16. She was worried about the inflation of fiat currency.
17. The country decided to abandon the gold standard and move to a fiat currency.
18. He had a collection of fiat currency from different countries.
19. The government introduced new fiat currency notes.
20. He was familiar with the history of fiat currency and its effects on economies.
21. She was concerned about the stability of fiat currency in light of the recent economic downturn.
22. The country's fiat currency was devalued in the face of high inflation.
23. He was interested in the relationship between fiat currency and cryptocurrency.
24. She was worried about the government's ability to print more fiat currency and the potential inflationary effects.
25. The country's fiat currency faced challenges due to political instability.