Fiat currency is currency that has been legal by some government that is not backed by a physical commodity such as Gold or Silver or Oil for example. The value of fiat money,  can be USD or EURO or GBP or something else. There is always a certain relationship between fiat currency and Gold and other valuable materials. So in some world you need some material mostly for all countries in the world is GOLD to be backed up for fiat. So this opens many other questions is it good or bad to have fiat as prime or to change to crypto and blockachain technology.

Some many believe that fiat currency system is the best option. International adoption has taken place for a number of reasons. What is the reason for this, some say that is obvious one and that is GOLD is something that will run out eventually and paper money wont. Then for what is good fiat. For one thing, it allows governments to provide stimulus, take on debt and provide investment. That is main purpose and relationship between Fiat currency and Gold.