It is based on government decree from "summary" of The Fiat Standard by Saifedean Ammous
The concept of fiat money is one that is based on government decree. This means that the value of the money is not backed by anything tangible, such as gold or silver. Instead, its value is determined by the government that issues it. In other words, fiat money has value because the government says it does. Fiat money is a relatively recent development in the history of money. Throughout most of history, money was backed by a commodity such as gold or silver. This gave money its value, as it could be exchanged for a fixed amount of the commodity. However, in the modern era, governments have moved away from this system and instead rely on ...
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