Fiat money is a type of currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. It is typically designated by the issuing government to be legal tender and is authorized by government regulation. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it
. The term "fiat" is a Latin word that is often translated as "it shall be" or "let it be done" and is used in the sense of an authoritative or arbitrary order or decree
. In the context of money, fiat money is made legal tender by a government decree or fiat and is not redeemable in a precious metal
