Topic summary
Fiat currency
Extracted from the Wikipedia article Fiat money.
18th and 19th centuries
An early form of fiat currency in the American Colonies was "". Provincial governments produced notes which were fiat currency, with the promise to allow holders to pay taxes with those notes. The notes were issued to pay current obligations and could be used for taxes levied at a later time. Since the notes were denominated in the local unit of account, they were circulated from person to person in non-tax transactions. These types of notes were issued particularly in Pennsylvania, Virginia and Massachusetts. Such money was sold at a discount to silver. The government would then spend them, and they would expire at a fixed later date.