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Crypto / DeFi

Fiat

Traditional currency issued and backed by a government or central bank (euro, dollar, pound), as distinguished from cryptocurrencies.

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"Fiat" is the term the crypto community uses for traditional currencies — the euro, the dollar, the yen — whose value isn't backed by a physical asset, but by trust in the government or central bank that issues them.

Fiat vs. crypto

Unlike a cryptocurrency, whose issuance is usually limited by rules fixed in its protocol (such as Bitcoin's 21 million cap), the supply of a fiat currency is controlled by the relevant central bank, which can increase it according to its monetary policy.

"On-ramp" and "off-ramp"

Converting fiat money into cryptocurrencies (buying crypto with euros) is called an "on-ramp"; the reverse process, selling crypto and receiving euros into your bank account, is called an "off-ramp". Most of these conversions happen through a CEX or stablecoins that act as a bridge between both worlds.