What Is A Fiat Wallet?

A flat wallet, otherwise known as a crypto wallet, is necessary software to keep crypto data safe, as well as to protect transfers. Click through to learn more about it!

Updated October 2023

Fact checked by Cathy Gresham

What Is A Flat Wallet?

Most people know wallets as handy little pouches or cases used to help us carry around our credit cards and cash in day-to-day life. But in this digital age, there are more and more types of wallets being used both online and offline. One such type of wallet is a fiat wallet – but exactly what is it?

The term ‘fiat wallet’ is one that often catches a lot of people off guard because they are unfamiliar with it, but fiat wallets are actually a lot more familiar than you may think. So, if you want to understand fiat wallets a lot more, then check out the information below to find out everything you need to know!

What Is A Fiat Wallet?

A fiat wallet is a common type of wallet that is used to store fiat currencies.

Fiat currency, or fiat money as it’s sometimes called, is a government-issued type of currency that is not backed by a commodity (such as gold). Commodity money rises and falls with the prices of things like gold or silver, but fiat money doesn’t do that. Instead, fiat money is backed by the government that issues it.

Some examples of fiat money include the US dollar ($) and the Euro ().

So, this means that any kind of wallet that stores currencies like the US dollar is technically a type of fiat wallet. By this definition, the wallet you carry around with you is actually a type of fiat wallet. Your bank account is a type of fiat wallet. Any digital wallet on websites that stores a fiat currency that you use to purchase or sell things online is classed as a type of fiat wallet.

Because the term ‘fiat’ wallet is not regularly used in day-to-day use, it’s very easy to misunderstand what a fiat wallet is. In reality, fiat wallets are the most commonly used type of wallet out there so there’s no need to be wary of them!

Fiat Wallets And Cryptocurrency

Most of us are unfamiliar with the term ‘fiat’ wallet because we haven’t really had to use it. Most people only use one type of currency so they have only ever used one type of wallet. However, in recent years, more and more people have begun referencing the wallets they have as ‘fiat’ wallets – but why?

It’s because of the emergence and rise of another type of currency – cryptocurrency.

What Is Cryptocurrency?

Cryptocurrency is a type of digital currency that uses a decentralized system to record and verify transactions. It works like any other currency but many have been using it to speculate by converting real money (fiat or commodity) into units of a cryptocurrency and hoping it becomes worth more than what they paid for it.

It’s a pretty complex and risky system that few people understand, and even fewer actually use it.

How Are Fiat Wallets Used On Cryptocurrency Platforms?

How Do Crypto Wallets Work?

Around 2019, cryptocurrency saw a huge spike in popularity as some people tried to use it as a type of investment – but there was an issue.

A lot of banks (and other traditional types of fiat wallets) took long amounts of time to transfer payments to cryptocurrency exchange platforms to buy units. If you wanted to buy units in a certain cryptocurrency, a bank transfer could take days to come through.

This was a major problem for cryptocurrency investors because the value of cryptocurrencies fluctuates so wildly and quickly, and short windows of time would pop up when a cryptocurrency was valued very low.

This would be the best time to purchase lots of units to sell later for a profit but due to the delays caused by regular bank transfers, a lot of people would miss out on good deals, sales, mispricings, arbitrage opportunities, and auctions.

Also, conventional fiat wallets like banks did not ‘store’ cryptocurrencies and because cryptocurrencies are a digital type of currency, you couldn’t print out notes and keep them in your regular wallet.

As a result, certain cryptocurrency exchange websites came up with a solution – fiat wallets.

These would be digital wallets attached to your cryptocurrency exchange account on certain platforms (such as Coinbase) where investors could store fiat money. By having a wallet of fiat money already accessible on these exchange platforms, investors could quickly and easily buy units of cryptocurrency without facing the delays that come with using a bank account.

This meant that investing in cryptocurrency became more efficient all through the use of this fiat wallet.

This is why the term ‘fiat’ wallet became more commonly used – because cryptocurrency exchange websites and the people who used them needed to differentiate between the two types of digital wallets they had in their accounts. The wallet that stored cryptocurrencies became the ‘crypto wallet’ and the wallet that stored regular money or fiat money became the ‘fiat wallet’.

In Summary: What Does This Mean For You?

So, fiat wallets are basically the full term used to describe any kind of wallet or account that stores fiat money like the US dollar.

Unless you actively invest in (speculate) or use cryptocurrency, it’s unlikely that you will ever be offered a different type of wallet for storing your money online. Most websites and banks only offer fiat wallets to store and transfer money and as a result, the term ‘fiat’ is rarely ever affixed or used.

However, the future is still uncertain with cryptocurrency.

In the future, we may see more and more banks and websites start to offer cryptocurrency wallets alongside fiat wallets so their customers and clients have more freedom when it comes to the currency they want to use. For now, it looks like cryptocurrency is not widely used enough to justify this change – but if it does happen in the future, you will be prepared!


Final Thoughts

We’ve made it to the end of the guide! Now that we have finally reached the end, we are truly hoping that we have been able to help you learn more about what a flat wallet is, as well as why it is such an important thing to have if you are currently in the world of cryptocurrency.

Editor's Note:

At Personal Finance Guru, we want to help you maximize your lifestyle through personal finance. You can trust the integrity of our independent financial advice. Our opinions our own and have not been provided, review, approved, or endorsed by any advertiser or financial product provider. To support and grow the site, however, we may receive compensation from the issuers of some products.

Author bio:

Cody Beecham

Cody Beecham


Cody is the founder and owner of Personal Finance Guru. His day job is as a management consultant at one of the Top 3 firms (think Mckinsey, Bain), where he advises Fortune 500 C-suite clients on their most important and pressing business problems. He completed his business education at Harvard Business School. 

After seeing the lack of personal finance education for regular people, Cody started the website with the mission to provide everyone access to information that will help them achieve their financial goals.

Cody approaches personal finance from a maximalist perspective, shunning typical advice around simply not buying a cup of coffee instead of more effective methods like investing in yourself to quickly grow your income. 

He believes in saving money and investing for the future, but he also knows that you need to enjoy life today. That’s why Cody approaches money with a sense of humor and a positive attitude. He knows that if you’re not having fun while you’re growing your wealth, then what’s the point?

Cody approaches life with the same gusto that he brings to personal finance. He loves to travel and experience new cultures, and he is an avid reader and learner. He also enjoys playing sports (especially tennis) and spending time with his family and friends.