Discover the differences between fiat money and legal tender, their roles in the economy, and why it matters for your financial insights.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Somer G. Anderson is CPA, doctor of ...

Fiat money is a currency issued by a government that is backed by the authority and power of that government and its economy rather than a physical commodity. Historically, governments would mint ...

Fiat money refers to a type of currency that holds value because a government declares it as legal tender, rather than being backed by a physical commodity like gold or silver. Most modern economies ...