Talk:Fiat money

Distinguishing money according to the use value of its underlying

Are there noteworthy sources that consider gold-backed money to be fiat money? For most of us, gold has no direct use other than as something that looks cool; it has value to us mostly because it has value to those we exchange with... which sounds a whole lot like fiat money to me. If there are noteworthy sources that discuss this, I'd like to see mention of the topic in this article. —Quantling (talk | contribs) 20:17, 18 June 2025 (UTC)

The important word is Latin: fiat [let it be done, make it so]. The $10 / €10 / ¥100 banknote in your pocket has a value different from an arbitrary piece of similar sized paper because the law says so. The gold chain around your neck has a value different from a steel bicycle chain because the market assesses it thus. As a medium of exchange, not a lot of use this side of the apocalypse though I suppose you could pawn it for cash. (Forex markets are a whole different subject that I'm not getting into because they don't fundamentally affect anything unless you live in Zimbabwe.) 𝕁𝕄𝔽 (talk) 12:52, 19 June 2025 (UTC)

So as to your specific suggestion that something be said in the article - what? Why? And cowrie shells? Wampum beads? Lumps of coal? 𝕁𝕄𝔽 (talk) 13:06, 19 June 2025 (UTC)

Thank you for your reply. I apologize that my background and experience is so different from yours and that I am asking questions that likely seem simplistic to you.

I see the first two sentences of the article, Fiat money is a type of government-issued currency that is not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. Fiat currency is typically designated by the issuing government to be legal tender, and is authorized by government regulation. but, if I am understanding you correctly, the heart of the definition of fiat money is that it is declared legal tender by law. That fiat money is typically not a tangible asset (nor backed by a tangible asset) is not essential to the definition, though it is frequently the case. That is, maybe we should reverse the order of the two sentences, and move the word "typical" to the now second sentence? Fiat currency is designated by the issuing government to be legal tender, and is authorized by government regulation. Fiat money is typically not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity.

Also, I am unfamiliar with the use of cowrie shells, Wampum beads, and lumps of coal as money. If you already know ... were they declared to be money by some authoritative source (perhaps subsequent to their more free-market introduction as a medium of exchange) or were they never so declared? If they were so declared at some point, you would say that they then became fiat money despite that they also had some intrinsic value, right? Again, thank you for taking the time to introduce me to your knowledge sphere. —Quantling (talk | contribs) 13:39, 19 June 2025 (UTC)

Absolutely no question of an apology for good faith contributions, the question doesn't arise. And I am no expert!

Before changing the order, I would want to see reliable sources. Unfortunately the topic has become so politicised that these are not easy to find online. We need someone with access to a good university library to contribute.

Wampum and cowrie shell were used as media of exchange by local convention. Maybe a chieftain declared them to be such in the dim and distant past (which would make them fiat) but that is lost in the mists of time. European invaders considered the people who used them to be insane or worse: their users considered the palefaces equally insane for prizing round shiny discs of uselessly soft metal.

Useful objects like coal can be used as a barter intermediary: you want my sack of grain but I don't want your cow. But we can both always use coal, so we agree how much coal for my grain and leave you to find someone who will trade coal for cow. Not terribly practical so you can see why coinage won out. 𝕁𝕄𝔽 (talk) 14:53, 19 June 2025 (UTC)

The cause of my diffidence is company scrip, a kind of money created by a company in payment for labour, that could only be spent in the company store. Its existence is a result of a order by the owner(s) of the company. So in that sense, it is a fiat currency. One might argue that it is legal tender in a place where the company's word is law.

This of course is an edge case, only marginally relevant but the the opening sentences can't ignore it. 𝕁𝕄𝔽 (talk) 15:44, 19 June 2025 (UTC)

I am probably not in a position to differentiate overly politicized sources from those that are sufficiently nonpolitical. If you or someone else steps forward with better wording than mine ... great!; please edit the article directly or propose better wording here. If not, I may go boldly editing the article myself, with my text, with the hope that it will survive or, better, be improved there by subsequent editors. —Quantling (talk | contribs) 16:27, 19 June 2025 (UTC)

The lede doesn't currently acknowledge company scrip. I'm going to edit the lede to address the order of "declared" vs. "not tangible" but not addressing the company scrip issue. So, I hope that it will be considered an improvement even though it does not achieve everything we've discussed. —Quantling (talk | contribs) 17:41, 20 June 2025 (UTC)

Edge cases can ruin the clarity of a good lead section, so I agree. 𝕁𝕄𝔽 (talk) 21:15, 20 June 2025 (UTC)

Fiat "Money"

According most economists for something to be classified as money it must be intrinsically valued from Karl Marx to Ludwig von Mises there's a general agreement and this means, technically "Fiat Money" is wrong, and it should rather say "fiat currency". It may be so that the colloquial definition of "money" is just any token of exchange, regardless of type, however the experts do not agree that this is correct, overall the Wikipedia page goes against major work. ~2026-74178-7 (talk) 10:06, 3 February 2026 (UTC)

Yes, 'fiat currency' is indeed the correct term and Fiat currency redirects here. To get it changed requires a consultative process. Maybe I will have time later on to initiate it. 𝕁𝕄𝔽 (talk) 15:08, 3 February 2026 (UTC)

Wikipedia generally refers to use the name in common use rather than the strictly correct name (see policy wp:common name). Google Ngram viewer is not decisive but https://books.google.com/ngrams/graph?content=fiat+currency%2C+fiat+money&year_start=1500&year_end=2022&corpus=en-2009&smoothing=3 does suggest that "Fiat money" is (or at least was) significantly more popular. Even more to the point, John Maynard Keynes used the M word:

Fiat Money is Representative (or token) Money (i.e. something the intrinsic value of the material substance of which is divorced from its monetary face value) – now generally made of paper except in the case of small denominations – which is created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms of an objective standard.

So I don't think that a request to move would succeed and consequently will not propose it. In any event, Fiat currency redirects to this article so the effort is not justifiable. Critically though, the first sentence should have contained the term 'fiat currency' and I have just now done that. 𝕁𝕄𝔽 (talk) 19:51, 5 February 2026 (UTC)