Fiat Currency

Quick definition

Government-issued money like the dollar, euro or yen — not backed by a commodity.

Fiat is regular national currency: it has value because a government declares it legal tender and people trust it, not because it's backed by gold. USD, EUR, JPY, KRW and VND are all fiat.

In crypto, 'fiat' marks the boundary: a fiat on-ramp converts your normal money into crypto; cashing out converts back. Bitcoin's fixed 21-million supply is often contrasted with fiat, which central banks can print.