Fiat currency is government-issued money — the US dollar, euro, yen and so on — that is not backed by gold or any physical commodity. Its value rests on trust in the issuing government and the requirement that taxes be paid in it. "Fiat" is Latin for "let it be done".
Because supply is managed by central banks rather than fixed by nature, fiat can be expanded, which over time tends to erode purchasing power through inflation. That flexibility is also a feature: it lets policymakers respond to crises in a way a rigidly fixed money supply cannot.
On this site, crypto prices are almost always quoted against a fiat currency, usually the US dollar. Stablecoins exist specifically to hold a steady value against fiat, bridging the gap between traditional money and crypto markets.
Worked example
When you see Bitcoin priced at "$60,000", that figure is quoted in US dollars — a fiat currency.
Related guides
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.