Fiat money is money by decree or by legal imperative. The term comes from the Latin word fiat, which means ‘let it be done’ or ‘let it be so’.
It is a type of fiduciary money that was formerly backed by a precious metal but is no longer backed by any commodity since the gold standard was abandoned.
Fiat currencies or fiat money is what we commonly understand as money. Cryptocurrencies have emerged as an alternative to fiat money.