Fiat currency is a government-issued currency that is not backed by a physical commodity, such as gold or silver. Instead, its value is derived from the government's declaration that it is legal tender and can be used to settle debts and taxes. Fiat currencies are typically managed by central banks, which control the supply of money and use monetary policy tools to influence the economy. Examples of fiat currencies include the US dollar, euro, Japanese yen, and many other national currencies.
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