To say that modern fiat currencies are backed by nothing is wrong. They are backed by debt. Debt is what gives fiat money its value. People are obliged to pay it back, and there is therefore an inherent need for it.
However, debtors can default on their debt. When they do, the currency issued for the defaulting debtors becomes unbacked, and the currency as a whole looses value.
A fiat currency is in other words only as good as the debt issued to create it.
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