(posted this comment somewhere else too)
(Paper) money is practically actually valuable because you need it to pay taxes. Gold, diamonds etc you could do without. Of course there is more nuance but taxes force people to value currency and therefore also accept it from others (because you need some of it or you go to jail), which gives currency the circular value.
It’s a lot more backed by the faith that if you don’t manage to get some you go to jail.