Fiat currency: what it means in the crypto world
Fiat is a traditional government currency, such as the zloty or the euro, whose value rests on trust in the issuer rather than on a commodity.
English term: Fiat currency
Fiat (from the Latin fiat, “let it be done”) is the common name for traditional currencies issued by a state as legal tender, such as the zloty, the euro or the dollar. Their value comes not from gold backing but from trust in the state and the central bank, and from the obligation to accept them in settlements. Central banks can regulate their supply.
In the crypto world, “fiat” refers to the entry and exit side: a fiat deposit means buying crypto-assets with zlotys or euros, and a fiat withdrawal means selling them with a transfer to your bank account. A crypto/fiat pair is priced in a given currency, for example bitcoin/zloty. Fiat should not be confused with stablecoins, which only imitate its value but are not fiat themselves.
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This entry explains a concept and is not an investment recommendation. Cryptocurrencies and leveraged trading carry a risk of losing money. Risk Warning.
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