Legal tender
It is generally only mandatory to recognize the payment of legal tender in the discharge of a monetary debt from a debtor to a creditor.
[1][3][4][5] Coins and banknotes are usually defined as legal tender in many countries, but personal checks, credit cards, and similar non-cash methods of payment are usually not.
Banknotes issued by retail banks in the UK (Scotland and Northern Ireland) are not legal tender, but one of the criteria for legal protection under the Forgery and Counterfeiting Act is that banknotes must be payable on demand, therefore withdrawn notes remain a liability of the issuing bank without any time limits.
[citation needed] When the so-called "Swiss" dinar ceased to be legal tender in Iraq, it still circulated in the northern Kurdish regions.
[citation needed] This is also true of the paper money issued by the Confederate States of America during the American Civil War.
During World War II the United States printed a series of Hawaii overprint notes as an emergency issue after the attack on Pearl Harbor.
The intent of the overprints was to easily distinguish United States dollars captured by the Imperial Japanese Armed Forces in the event of an invasion of Hawaii (which never happened) and render the notes worthless via demonetization.
A cashless society is an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins.
Australian notes are legal tender by virtue of the Reserve Bank Act 1959 (Cth) s 36(1),[15] without an amount limit.
The Reserve Bank Act 1959 expressly prohibits persons and states from issuing "a bill or note for the payment of money payable to bearer on demand and intended for circulation".
For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit victims; however, official policy suggests that the retailers should evaluate the impact of that approach.
In the case that no mutually acceptable form of payment can be found for the tender, the parties involved should seek legal advice.
In the People's Republic of China, the official currency renminbi serves as the unlimited legal tender for all transactions.
[25] In June 2021, El Salvador became the first country to accept Bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.
Kosovo and Montenegro, which are not members of the European Union and the Eurozone and do not have a formal monetary agreement with the EU, unilaterally adopted the euro in 2002 as their de facto domestic currency to ensure monetary stability and to continue to avoid the high/hyper inflation seen in preceding decades: this means that the euro is not a legal tender there, however it is treated as such by the government and the people.
Legal tender was enacted the first time for gold and silver coins in the French Penal Code of 1807 (art.
According to the Economic and Monetary Union Act 1998 of the Republic of Ireland, which replaced the legal tender provisions that had been re-enacted in Irish legislation from previous British enactments, "No person, other than the Central Bank of Ireland and such persons as may be designated by the Minister by order, shall be obliged to accept more than 50 coins denominated in euro or in cent in any single transaction."
[29] The Indian rupee used to be an official currency of several other countries, including the Straits Settlements (now Singapore and parts of Malaysia), Iraq, Kuwait, Bahrain, Qatar, the Trucial States (now the UAE), Oman, Aden Colony and Aden Protectorate (now parts of Yemen), British Somaliland, British East Africa, and Zanzibar.
This creation of a separate currency was an attempt to reduce the strain put on India's foreign reserves by gold smuggling.
The Act came into force in 1967, establishing as legal tender all New Zealand dollar five-dollar banknotes and greater, all decimal coins, the pre-decimal sixpence, the shilling, and the florin.
[43] Throughout the United Kingdom, Royal Mint coins valued £1, £2, and £5 sterling are legal tender in unlimited amounts.
In a 1976 case, Miliangos v George Frank Ltd, the House of Lords established that the English courts could order debts to be paid in currencies other than sterling under certain circumstances, overturning two centuries of precedent.
1862 greenbacks (Legal Tender Notes) at first traded for 97 cents on the dollar but gained/lost value depending on fortunes of the Union army.
[citation needed] This resulted in a situation in which the greenback "Legal Tender" notes of 1862 were fiat, and so gold and silver were held, and paper circulated at a discount because of Gresham's law.
"[47] The ruling in the Legal Tender Cases (which include Juilliard v. Greenman) led later courts to "support the federal government's invalidation of gold clauses in private contracts in the 1930s.
On the other hand, coins made of gold or silver may not necessarily be legal tender, if they are not fiat money in the jurisdiction where they are proffered as payment.
The Coinage Act of 1965 states (in part): United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues.
In addition, movie theaters, convenience stores, and gas stations may refuse to accept large denomination currency as a matter of policy or safety.
[citation needed] Zimbabwe has a multi-currency system that recognizes the Zimbabwean ZiG, the US dollar and the gold (Mosi-oa-Tunya (coin)) as legal tender.
[53] The Reserve Bank of Zimbabwe is also issuing the ZiG, a digital token backed by gold, which has also been granted legal tender status.
