Fiat currency

Fiat currency is a currency that is not backed by a physical commodity like gold or silver, but is instead supported by the government's declaration and faith in the currency. The value of the currency depends on the economic stability of the country and the trust in its government, and its value is relative to other currencies in the foreign exchange market. The term "fiat" comes from the Latin word meaning "let it be done," as it signifies that the currency has value simply because the government says it does. Fiat currency is common throughout the world as it allows for easier monetary policy and greater control over a country's economy.