What is Fiat

Fiat currency is currency issued by governments that derives its value from government support without backing it up with tangible possessions such as gold. Government entities such as central banks retain control over the respective amount of fiat money printed. Fiat currency holds inherent risks related to its centralization. If too much money is printed by authorities to motivate local economies, the currency loses its value as it is subject to hyperinflation. It also is devaluated if citizens lose trust in their governments.