Fiat Money Explained
Fiat money is government-issued currency not backed by physical assets like gold. It's commonly used in most countries, for instance, the US dollar and the Euro.
The value of fiat money is not intrinsic but is determined by supply and demand. While it can bring economic stability, it can also lead to hyperinflation.
Understanding Its Use
Fiat money is used for transactions within a country. Its value depends on factors such as the country's economic performance and interest rates. It can't be exchanged for other assets.
The government safeguards fiat money from counterfeiting and manages its supply. A country with a stable political system usually has a strong fiat currency, increasing purchasing power.
Top 10 Fiat Currencies Worldwide
- US Dollar ($)
- Japanese Yen (¥)
- United Arab Emirates Dirham (د.إ)
- Chinese Yuan (¥)
- Euro (€)
- Australian Dollar ($)
- British Pound (£)
- Indian Rupee (₹)
- Mexican Peso ($)
- Canadian Dollar ($)