Hard money is a form of currency relative to goods and services that is directly backed by a tangible commodity, such as gold or silver, rather than a fiat or "soft" currency. The term “hard money” is used to distinguish it from what is referred to as soft money, or fiat money, which is backed by a government’s promise of stability and exchangeability. Hard money has been used by many societies since ancient times as a form of commodity money and has been a reliable way to maintain exchange value, facilitate transactions, and act as a store of value.

The monetary system of most countries today has shifted from commodity-backed money (i.e. hard money) to a fiat currency (i.e. soft money). This shift has largely been due to practical matters surrounding the difficulty of storing, transporting, and trading gold, silver, and other commodities, relative to paper currency which can be issued in a much more convenient form, and increasingly digital currency today.

Despite the fact that hard money is no longer the primary means of economic circulation in most countries, it still remains a desirable commodity backed asset. Hard money’s value is generally consistent relative to soft money and goods and services, since it is backed by a valuable tangible commodity, whereas soft money currencies are usually only backed by a government’s promise. Furthermore, hard money can provide a level of confidence against a currency's uncertain future value due its relative stability and the fact that hard money is not subject to the same type of volatility as soft money, since the commodity backing holds a more tentative and reliable value.

Hard money is not only a desirable asset for many investors, it is also the investment of choice for many private lenders and entities, like hard-money lenders. These creditors will provide private loans in exchange for collateral such as real estate or deposit accounts. The return rate from hard money investments are typically higher than traditional investments and banks, as hard-money lenders will charge higher interest rates in exchange for taking on a greater risk due to the lack of easily liquidated collateral. With this higher return rate comes with the risk of a potentially higher default rate, so it is important for investors to be aware of the risks when considering hard money investments.

Overall, hard money is a form of currency that can provide a relatively stable value and a strong exchange rate compared to soft money. It is historically valued for its usefulness in facilitating the exchange of goods, acts as a store of value, and can provide a level of confidence in a currency’s future value. Although it is no longer the primary means of economic circulation, it can still be a desirable asset for investors and may be the choice of investments for many private lenders. It is important for those considering hard money investments to be aware of the risks inherent to these investments, as the return rates are typically higher but come with a higher risk of default.