Fiat money

Fiats money, a money from that anything, is not money, whose legal covering is either not complete or is missing by material net assets. Contrary to Warengeld and Kurantmünzen, which have an eigenvalue, it actsover material-worthless money, with which no covering is present in gold or similar values. Fractional coins and Buchgeld are to be regarded as Fiats money.

The designation Fiat money (it becomes money) is derived from latin Fiat lux (it becomeLight) from the creation history of the Bible, the genesis (1. Mose 1.3).

This kind of the creation of money can be usually used by the publisher, the central bank, if necessary without covering by material net assets.

The money from that nothingno special kind of money is recognizable and of nobody as such, since coins, lights or account entries it cannot be regarded whether and to which extent they are legally covered. With Fiats money legal covering is substantial, not the economical (seeTheoretical definition in the article money). Fiat money can be economically covered by a being and a performance, although it does not possess legal covering.

The possibility for the creation of Fiats money exists only so long, like the private market participants (households, banksand other enterprises) to in such a way emitted money a value attach. By explanation to the “legal tender” with usually “for an unlimited period debt-releasing acceptance obligation”, with that deliveries (z. B. Taxes) to be paid must force, can a state its private market participants, the Fiat money oneTo attach worth.


not or and thus, at least partly, Fiats are not completely covered spreading practical all currencies money. During commercial and supra-national payments frequently material securities become with possibly. monetary loss (inability to pay or inflation) additionallyagreed, e.g. with a gold clause.

other kinds of money

  • Warengeld Fiat cannot be money, since the commodity is a useful property.
  • Currencies, which are covered by a gold standard.


see also: Creation of money


  > German to English > (Machine translated into English)