What is fiat?
Crypto is full of confusing jargon, isn’t it? Here at Bitstamp, we want to make crypto clearer. Today we will start with the term “fiat on-ramp”. Even if you’ve been in crypto only a short time, you will have probably heard this term. But what does it mean?
So let’s start with the “fiat” part, often referred to more fully as “fiat money”. No, we’re not talking about any money related to the Italian motoring powerhouse - Fabbrica Itaqliana Automobil Torino. No, here we’ll be talking about “fiat” with a lower-case “f”!
The Merriam Webster dictionary defines fiat as “an order given by a person in authority”. As with many long-established ideas, the term comes from the Latin, in this case for “let it be done” or “it shall be”. It is an authorization, a permission and/or an official sanction for something. Imagine it like a decree. The word is most commonly used to refer to money printed by central banks.
What is fiat money?
So, yes, fiat money is the technical term used for the modern paper currencies we all know so well: US dollars, pounds sterling, euros, to name just a few. But what do they all have in common? That’s right, they are all currencies that are issued by a government - which also backs it.
That’s why they are called “fiat” since their existence is ordered by an authority, in this case the ultimate enforcer - the government. Put simply, fiat money is the euros, dollars, pounds and other central bank issued currency you have in your (traditional) wallets.
When the gold standard was dropped by the US government in the early 1970s, that meant that US dollars were no longer backed by gold. This removal of the link between precious metals and money became the established system across the world, heralding the start of fiat money.
So, instead of being backed by gold or silver, fiat money’s value comes from the stability of the government that issues it - plus the supply/demand relationship.
Fiat money turning to crypto
Chainanalysis research this year documents a 880 percent rise in crypto adoption over the past 12 months. With crypto ownership now surging, many people are turning to the limited number of high quality exchanges called “fiat on-ramps” to enter the market.
Then they are able to enter a growing ecosystem to examine digital assets with limited supplies, strong tokenomics, staking options, and other relative benefits.
What is a fiat on-ramp?
A fiat on-ramp is a term we use to identify an exchange that allows you to buy digital assets in exchange for fiat money. They are very powerful since they provide quick and easy access to the whole crypto world.
But what if you want to sell your digital assets in exchange for fiat money? Of course, crypto isn’t accepted everywhere (yet) and so you may need to use dollars, euros, or pounds to pay for something. You’ll need a fiat off-ramp too!
Many crypto die-hards never use these “off-ramps” but they are still important. You’ll be happy to hear that Bitstamp allows you to convert fiat to crypto and back quickly and easily!
Bitstamp - the fiat on-ramp of choice!
So, we hope that’s all clear now! Clarifying what crypto terminology really means is our aim. And our continued push for mainstream adoption is dependent on that. Did you know that Bitstamp is the longest established fiat on-ramp (and off!) for the crypto world?
We accept USD, EUR, and GBP, and you can send and withdraw your funds by credit card and bank transfer.
So, where better to start your journey in the crypto ecosystem? Make your first fiat deposit now!