Fiat Money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. Fiat money has been used for centuries and its value comes from people's faith in the issuing government.While fiat money may not be backed by any physical commodity, it does have the backing of the government which can use its power to enforce tax laws and other regulations on those who use the currency. This gives fiat money a certain amount of stability which can be important during times of economic instability.
