Fiat currency is money issued and backed by a central bank. It’s the currency we use to pay for everyday expenses and includes the notes in your pocket, digital money in a bank account, and the reserves kept by commercial banks at a central bank. There is nothing underpinning fiat money but trust in the government.
Cryptocurrency is digital money governed by computer code, its blockchain and the crypto community. Because of these characteristics, the majority of cryptocurrencies require no intermediaries or central authority to oversee and facilitate transactions. It is regarded by its proponents as the currency for the internet age, the next step in the evolution of money.