A money whose usefulness results, not from any intrinsic value or guarentee that it can be converted into gold or another currency, but only from a government's order (fiat) that it must be accepted as a means of payment.
Bank notes used as money to finance transactions (pay for things) which are not "backed" by a valuable commodity like gold or silver which could be exchanged against the note at a bank. Fiat money is the only money used in the world today, but in the 19th century it was printed mainly to finance wars, because people didn't trust the government enough to forget the immense potential for abuse that this system had. If a government wants to increase its expenditures without increasing taxes and without borrowing, it can just print money and pay with it. This invariably leads to inflation.
Objects that are money because the law decrees or orders them to be money. (p. 254)
A medium of exchange such as a coin which is accepted at a face value which is greater than its intrinsic value as a result of backing by the issuing authority (usually government).
paper money made legal tender by law, although not backed by gold or silver.
paper currency made legal tender by a fiat of the government, but not based on or convertible into coin See more explanations...
money that the government declares to be legal tender although it cannot be converted into standard specie
Money that is not backed by specie and is legal tender by decree
Money not backed by specie and is legal tender by virtue of decree.
is intrinsically useless; is used only as a medium of exchange. Source: econterms
Fiat Money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country that issued it. Canada's currency falls into this category.
Money which is declared to be legal tender but has no intrinsic value and is not backed by (not legally defined by convertibility into) any tangible commodity such as gold, silver, etc.. Fiat money is money by decree or proclamation. It derives its value from the perceived authority and creditworthiness of the issuer (national government - central bank of the respective country).
Nonconvertible paper money.
Legal tender currency issued by a government's central bank that is not supported by gold or silver.
Money that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves.
Money printed by a government as legal tender which is not redeemable and which lacks economic value.
Money that has little or no intrinsic value as a commodity; it is costless to produce, usually taking the form of tokens or pieces of paper, and is not redeemable for any commodity.