It is often associated with paper money unbacked by fixed assets, issued without the promise of redemption in some other form, and accepted by tradition or social convention. Fiat money is called fiduciary money in many languages.

The widespread acceptance of a fiat currency is enhanced by a central authority mandating its acceptance under penalty of law and demanding it in payment of taxes or tribute. Fiat money can be contrasted with alternative forms of currency such as commodity money and private currency.

Most currencies in the world have been fiat money since the end of the international gold standard of the Bretton Woods system in 1971. However, some of the major currencies today, despite being based essentially on arbitrary decree, have become so trusted that they are termed hard currency.

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