define fiat currency
Freebase(0.00 / 0 votes)Rate this definition: Fiat money. Fiat money is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country. The term derives from the Latin fiat. Fiat money originated in 11th century China, and its use became widespread during the Yuan and Ming dynasties.