I stumbled upon this thought provoking sentence in an otherwise flawed comment at the Telegraph considering the value of the Bristol Pound versus that of sterling:

Money has no inherent value, it is a means of exchange and a tool. What gives it value, is the acceptance by Govt as tax.

An interesting idea.

To elaborate slightly, I’m used to the idea that only government-fiat gives a fiat-currency value, and this is backed by your future earning potential and the Government’s unique capacity to confiscate it. I am also used to arguments that government borrowing and money printing, and the creation of electronic money in the loan ledgers of banks, will eventually overwhelm even that special form of backing. The comment above provides a different more practical perspective, that anything could be accepted as currency but because only fiat-currency is accepted for tax purposes in practice you must deal in the fiat currency.

This is real in at least one case, Bitcoin, where users are advised to keep enough state-money handy to pay taxes.

It is worth observing, of course, that since tax is only imposed by force then in this interpretation fiat-money is imposed by force.