Fiat Money is a type of currency issued by the government and regulated by a central authority such as a central bank. Such currencies are legal tender and are not necessarily backed by a physical commodity. Instead, it relies on the economy's credit.

Fiat currencies such as the US Dollar, Pound or Euro derive their value from the forces of supply and demand in the market. Such currencies are always at risk of becoming worthless due to hyperinflation, as they are not linked to any physical reserves.

Although Fiat Money is considered a stable currency, this is still not always the case. The economic recessions over the years have made some shortcomings of fiat money evident. There is much belief that gold can be a more stable currency given its unlimited supply. In addition, the idea of central banks to control the economy and the continuous increase in global prices have increased the interest in cryptocurrencies.