Fiat Currency

Fiat currency is government-issued money, such as the US dollar, euro or yen, that is not backed by a physical commodity like gold but derives its value from government decree and public trust in the issuing authority. It is the traditional monetary system that cryptocurrency is most often compared and contrasted against.

Why it matters

The fiat-versus-crypto comparison usually centers on who controls issuance and settlement: fiat currency supply and monetary policy are managed by central banks, while most cryptocurrencies follow rules fixed in their protocol’s code. Understanding this contrast helps explain why crypto markets quote prices in fiat terms (like USD) while operating on fundamentally different settlement infrastructure.

Example

Most cryptocurrency prices, including those shown on our markets page, are quoted in a fiat currency like the US dollar for reference, even though the underlying assets settle on a blockchain.