All what you need to know about flat currency
It’s hard to learn something new if you don’t fully understand what already exists. Currently, the dominant form of currency is fiat money. What is fiat money? The U.S. dollar is an example of fiat money. The euro is fiat money. We all know fiat money. Let’s dive in and learn more about what fiat money really is
Fiat is the name for the type of currency that is the U.S. dollar, the euro, the Swiss franc, the Indian rupee etc. It’s basically the paper money we currently use. Fiat is a word, NOT an acronym. It doesn’t stand for anything. The definition of fiat money is “a form of money that a government declares to be legal tender”.
What the heck is legal tender?
It’s basically whatever the government has decided that people are allowed to use to settle debts or meet financial obligations like paying your taxes. This means that the U.S. government said that American citizens can use dollars to pay their taxes. That’s what makes the dollar fiat money. The government told us we could use it.
