Fiat
Government-issued money like the US dollar or euro, backed by state authority rather than gold or any commodity.
Fiat is money that has value because a government says it does. The US dollar and the euro aren't redeemable for gold; their worth rests on legal tender laws and public trust, not on any underlying commodity.
Crypto defines itself partly against fiat. Bitcoin's fixed 21-million supply is a direct response to central banks that can print fiat at will.
Yet fiat anchors much of crypto too. Stablecoins like USDC hold dollar reserves, and most trading is still priced and settled in fiat terms.
Related terms
A digital form of a country's official currency, issued and controlled directly by its central bank.
StablecoinA crypto token designed to hold a steady value, almost always pegged one-to-one with the US dollar.
FungibleDescribes assets whose units are identical and interchangeable, so one unit holds exactly the same value as another.
TradFiTraditional finance, the established system of banks, exchanges, and regulators that crypto positions itself against.