BANKING AFFAIRS

Detailed explanation-1: -Wampum was the first fiat money used in the America’s. It had a set value, equal to a certain amount of gold, established by Connecticut in 1645. Since the government of Connecticut established it as official money it is fiat money. The concept of paper currency was not well regarded early on.

Detailed explanation-2: -Fiat money is backed by a country’s government instead of a physical commodity or financial instrument. This means most coin and paper currencies that are used throughout the world are fiat money. This includes the U.S. dollar, the British pound, the Indian rupee, and the euro.

Detailed explanation-3: -China’s Song Dynasty issued the first known fiat currency in the 12th century AD. The Song nationalized a system of private promissory notes, or letters of credit merchants, had been using for centuries. Under the Song, the imperial government began printing a paper currency known as the jiaozi.

Detailed explanation-4: -For the most part, bills of credit were fiat money.

Detailed explanation-5: -The U.S. dollar is considered to be both fiat money and legal tender, accepted for private and public debts. Legal tender is basically any currency that a government declares to be legal. Many governments issue a fiat currency, then make it legal tender by setting it as the standard for debt repayment.