Fiat Money
The alternative to a commodity money system is fiat money which is defined by a central bank and government law, or "fiat", which defines legal tender. Typically fiat money is paper currency or base metal coinage, but can also be simply data such as bank balances and records of credit or debit card purchases.
Read more about this topic: Monetary System
Famous quotes containing the words fiat and/or money:
“Then for the Style; Majestick and Divine,
It speaks no less than God in every Line:
Commanding words; whose Force is still the same
As the first Fiat that produc’d our Frame.”
—John Dryden (1631–1700)
“As to your kind wishes for myself, allow me to say I can not enter the ring on the money basis—first, because, in the main, it is wrong; and secondly, I have not, and can not get, the money. I say, in the main, the use of money is wrong; but for certain objects, in a political contest, the use of some, is both right, and indispensable.”
—Abraham Lincoln (1809–1865)