Paper currency that has been declared legal tender but is not convertible into coins or precious metals is called <u>fiat</u> money.
The term is derived from the Latin word fiat, because of this a dedication through authority—in this case, it is the government that decrees the fee of the currency and is not representative of every other asset or financial device consisting of gold or a check.
Fiat cash, in a wide feel, all varieties of money which are made criminal tender via a government decree or fiat. The term is, but, commonly reserved for criminal-tender paper money or cash that have face values ways exceeding their commodity values and aren't redeemable in gold or silver.
Economists differentiate amongst 3 special forms of money: commodity money, fiat money, and bank money.
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