Fiat currency is a type of money that is issued by a government and has value because the government maintains it and people have faith in its worth. Unlike gold or silver, which have intrinsic value, fiat currency does not have physical backing. Instead, its value comes from trust in the issuing authority, typically a country's central bank. Most modern economies use fiat currency, such as the US dollar or the euro. These currencies are used for everyday transactions, like buying goods and services. The government regulates the supply of fiat currency to help manage the economy and control inflation.