Fintech Terminology / Glossary / Dictionary - F

Fiat Currency

Fiat currency is the type of currency that a government declares to be legal tender for transactions within its jurisdiction. It has value because the government maintains it as the accepted medium of exchange and enforces its use for various transactions, including buying goods and services, paying taxes, and settling debts.

Unlike commodity money (like gold or silver) that has intrinsic value, fiat currency has value based on the trust and confidence people have in the government that issues it. The value of fiat currency is largely symbolic and regulated by the government through monetary policy, such as controlling the money supply and interest rates.

Examples of fiat currency include the Indian Rupee (INR), US Dollar (USD), Japanese Yen (JPY) etc. The value of these currencies fluctuates in the foreign exchange market based on various economic factors, supply and demand dynamics, and geopolitical events.

FinTech Sandbox

A FinTech Sandbox is a regulatory framework or program that provides a controlled environment for financial technology (FinTech) startups and companies to develop, test, and launch innovative financial products, services, and technologies. It's designed to foster innovation in the financial industry while still maintaining regulatory oversight and consumer protection. The concept of a FinTech Sandbox aims to have a balance between encouraging innovation and ensuring that financial systems remain secure and reliable. It's a way to do development of new technologies and business models while minimizing the potential risks associated with untested financial innovations.

Forex cards

A Forex card is a prepaid payment card designed for international travelers. It's loaded with foreign currency before the trip, allowing users to make purchases and withdraw cash in the local currency of the destination country. Forex cards offer convenience, security, and exchange rate stability, making them a popular alternative to carrying cash or using regular debit/credit cards while traveling abroad.

Funding Source

A funding source refers to the origin or means by which money is provided for a particular purpose. It's the place or entity from which funds are drawn to finance activities, projects, or transactions. A funding source could be an individual, organization, government, or financial institution that provides the necessary funds to support a specific endeavor. It's essentially the pool of money that is used to cover expenses, investments, or other financial needs.

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