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In macroeconomics, chartalism is a theory of money that argues that money originated with states' attempts to direct economic activity rather than as a spontaneous solution to the problems with barter or as a means with which to tokenize debt,[1] and that fiat currency has value in exchange because of sovereign power to levy taxes on economic activity payable in the currency they issue.
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Chartalism is a non-mainstream monetary theory that defines money as a creation of the government that derives its value from its status as legal tender. It is directly opposed to the economic theory of money, which argues that money originally derives its value from its usefulness as a medium of exchange.