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Fiat currency is any money issued by a government or central bank and not backed by a commodity such as gold . Fiat currencies derive their value from the trustworthiness and stability of the governments supporting them, along with the laws of supply and demand.

Fiat money is legal tender whose value is tied to a government-issued currency, like the U.S. dollar, while cryptocurrency is a digital asset that derives its value from its native blockchain .

Investors buy these cryptocurrencies through exchange platforms for normal or FIAT currencies. Many investors claim that cryptocurrencies are much more beneficial than FIAT currencies . These claims can be true since the cryptocurrencies provide more perks where FIAT currencies are just beneficial when you own it.

The term fiat currency is commonly used to distinguish regular money from cryptocurrency , a digital payment form that can exist without a central bank.