Fiat currency is a type of government-issued currency that is unbacked by a physical commodity, such as gold or silver. The value of a fiat currency is derived from the supply and demand relationship and stability of the issuing government rather than the worth of a commodity backing it. Most of the world's modern paper monies are fiat currencies, including the US Dollar, Canadian Dollar and European Euro. 

Note: The term "local currency" and "fiat currency" are synonymous within your OpenNode experience.

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