Fiat Money Has Value Only Because It Is Declared To
A fiat is an authoritative order. The economic term describes money backed by decree rather than metal.
A fiat is an authoritative order or decree. Latin *fiat* means let it be done, and it is the word used in the Latin Bible at the creation of light. *Fiat money* is currency that has value because a government declares it legal tender, not because it can be exchanged for gold — which is how almost all modern currency works. The last major link to gold ended in 1971, when the United States stopped converting dollars into it.
- An authoritative order. *By royal fiat.*
- Let it be done (Latin). *Fiat.*
- Fiat money. *Fiat currency.*
- Fiat lux — let there be light. *Fiat lux.*
- Latin — *fiat*. *The source.*
Word forms
| Form | Word | Example |
|---|---|---|
| Noun | fiat | A fiat. |
| Plural | fiats | Fiats. |
| Compound | fiat money | Fiat money. |
| Phrase | fiat lux | Fiat lux. |
| Latin | fiat | Let it be done. |
- The change came by fiat.Decree.
- Most currency is fiat money.Economics.
- Fiat lux means let there be light.Latin.
What backs money
- Commodity money — the metal itself has value
- Representative money — a note exchangeable for gold on demand
- Fiat money — value rests on law and confidence
- The gold standard largely ended between the wars
- The final link was severed by the United States in 1971
Latin *fiat*, let it be done, third person subjunctive of *fieri*, to become or be done.
What is fiat money?
Currency whose value rests on government declaration and public confidence rather than on convertibility into gold or silver.
What does fiat literally mean?
Let it be done. It is the Latin word used in the biblical phrase fiat lux, let there be light.