A recent report of the Banking Awareness Committee in Saudi Banks revealed that the average life span of coins ranges between 20-25 years, compared to the shelf life of paper currency, which is estimated between 12-18 months only.

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The life span of a Fiat Currency is the same a that of life span of nation state.

So as long as States do not cease to exist the span is eternity. The only cases I can see this to happen is when countries volunteer to join a monetary union like EMU. Sorry I could not be of much help. I could not open the FT article.

George K. Zestos You could access the article (The average lifespan of a fiat currency isn't 27 years) using Financial Times on Twitter: https://twitter.com/ft/status/1187240438727630848

George K. Zestos : yes, indeed, it can be the same age as a nation state, but oftentimes it isn't. Brazil, for instance, saw a hyperinflation from 1985 to 1994. Throughout that period Brazil adopted a total of six different fiat currencies, but all throughout that time it remained the identical one nation state.

Thank you Manhal Shotar, I started reading the article and soon realized that people who like to promote Bitcoin as a currency with future employ this unsound evidence of 27 years life span of fiat currency. Therefore according to the bitcoin supporters as the bitcoin which already has already an age of 10 years is approaching this factitious 27 year fiat currency life span.

I could not force myself finish reading the article. Bitcoin is a very risky asset thus people must be very careful where they put their money. This month for example many people lost fortunes in Turkey from bitcoin embezzlement involving bitcoin.

Dozens, if not hundreds of fiat currency systems collapsed before Bitcoin even came into existence, the first in China in the 10th century AD: see source below

So, any information on the life span of fiat currencies independent of any personal views on cryptocurrencies would be greatly appreciated!

Ramsden, Dave (2004). "A Very Short History of Chinese Paper Money". James J. Puplava Financial Sense. Archived from the original on June 9, 2008.

The legitimacy of fiat currency depends on the government issuing it. Its acceptability will depend on the people willing to provide goods and services in exchange. Predicting its average life span depends on the sample size, the time period and events happening. Inflation and change of government will be major causes of the demise of fiat currency.

Chung Tin Fah, yes indeed, if one would have such empirical data, it would be of great help. Hence I'm searching for studies that have already attempted to make such assessments.

Moreover, as central banks are oftentimes rather independent institutions and strictly separated from government, one may need to take not only governments into account, but governments and central banks as separate entities (the ECB is the most extreme example here, I assume).

Patrick Schueffel I would recommend that you do it yourself. The starting point could be the definition of fiat money (which is different from paper money). In addition, of course, to the criteria used by the FT to debunk the claim that the average lifespan of a fiat currency is 27 years.

Manhal Shotar, thanks for the recommendation that I should do it myself. Unfortunately my time is very limited and that's also why I'm looking for already existing research that I could build on.

A hard part of this is to determine what exactly falls into the category of fiat. Do you use the term literally ("let it be done") as in an order from authority that this currency SHALL be used? Or do you include any coin, item, token, shell, etc that was traded at a value above its intrinsic worth? What time period do you consider? The Chinese have used non-redeemable paper money for hundreds and hundreds of years. Rai stones were used starting hundreds of years ago as well. Of interest would be if there were changes in that average length of use through time.

I hink we should keep things simple , Fiat Currency, is derives its existence and status by the will of a soveteign a state. If the state is here to state its Fiat currency will be here as long as the state exists.Thanks.

George K Zestos

Not necessarily as long as the state exists, though. Coinage/Monetary reforms can occur without a state ceasing to exist or adopting an umbrella monetary system. Henry VIII's great debasement could arguably have resulted in a fiat currency (under the definition of a money valued at more than it's intrinsic worth) since, when coins start trading locally by weight, instead of tale, then they become a de facto fiat currency as they were valued above their intrinsic value. I think an acceptable definition is the first sticking point.

I think we need to look at the simple definition of Fiat Currency. It exista because the state declared it to be so, It is a legal tender "THIS NOTE ISLEGAL TENDER FOR ALL DEBTS PUBlC AND PRIVATE" this is in the front side of the US dollar dollar bills. Which means if you accept for payment the US paper currency is because you trust the US government or any the other governments that issue their currency. That does not mean that there is quarantee that the value of the currency will be unchanged. The latter depend on many other reasons such as monetary policy and the the health of the economy. Indedd sometimes hyperinflations wiped out the values of currencies. best G Zestos

A good discussion. George K. Zestos, that is the definition of Fiat Currency that I prefer, as well, because it goes back to the root meaning of the word fiat. It is money by decree. As you say, it is money because the authority says it is. And that is regardless of what it is or its worth.

This does completely change our metric (and does not help us answer the original question) as this would cover even gold coin. eg a Proclamation of 20 July 1345 by Edward III "That the king's money of gold should be current within the realm, and be received in all payments, the noble at the value of half a mark, and the half and quarter in proportion" (Ruding, Annals of the Coinage of Great Britain, Vol 1, 1840, pg. 221) The noble is not something that most people would consider a fiat currency but note the similarity between "and be received in all payments" and "This note is legal tender for all debts public and private"

Additionally (continuing with British money), there were proclamations that revalued earlier coins which, to me, would be a terminus of a particular coinage when considering length of time used. This would greatly expand the number of currencies to tally!