4.3 Disadvantages of Fiat Money

1. Inflation Risks: Fiat currencies are vulnerable to inflation when governments print excess money, potentially reducing purchasing power.

2. Centralized Control: The issuance and regulation of fiat money are centralized, allowing governments and central banks significant influence over its value.

3. Trust Dependency: The value of fiat money hinges on public trust in the government's ability to manage the economy responsibly.