Banknotes and coins are considered legal tender, while stamps are not considered legal tender. Many countries consider coins and paper money to be an integral part of legal tender. Different jurisdictions understand and define legal tender differently. As a result, cashless forms of payment such as credit cards and cheques are never considered legal tender. The designation and specification of a national currency by legal norms and regulations should be recognized as a medium of exchange and as a source of payment of debts due. To the extent that legal tender includes all denominations in circulation, the sum of the coins and the value that can be accepted as legal tender differ from country to country. Money orders and cheques are not legal tender as they are only accepted at the discretion of the seller, lender or creditor. It is commonly referred to as legal money. U.S. legal tender regulations are very clear, although most people don`t like to think about the legal perspectives of the issue at hand. Section 31 of the Currency Act of 1965, entitled « Legal tender, » states that « United States coins and currencies (including Federal Reserve notes and circulation notes of Federal Reserve banks and national banks) are legal tender for all debts, public duties, taxes, and duties.

The Coinage Act of 1873 was replaced by the Coinage Act of 1965. The federal government introduced new regulations separating dime coins from the silver portion and adjusted the silver content to half a dollar. Demonetization refers to the law that aims to eliminate the legal tender of a particular currency. This happens in most cases in situations where the country(ies) decide to have a different currency than the existing ones. This means that currently available currencies are removed from the system so that they no longer circulate. This is usually done in circumstances where the country intends to replace old currencies with new ones. This will be achieved through the introduction of alternative coins and banknotes. On the other hand, demonetization is the direct opposite of demonetization, where the country recognizes available currencies as legal tender. In general, legal tender can take two basic forms.

A government can simply ratify a market-based commodity money like gold as legal tender and agree to accept the payment of taxes and execute contracts denominated in that commodity. Alternatively, a government may declare a counterfeit commodity or a worthless token as legal tender, which then adopts the characteristics of a fiat currency. When the Iraqi Swiss dinar ceased to be legal tender in Iraq, it was still circulating in the northern Kurdish regions and had a stable market value for more than a decade despite the lack of state support. This example is often cited to show that the value of a currency is not derived solely from its legal status (but that this currency would not be legal tender). Legal tender can be defined as the currency of a nation in the form of paper money and coins.3 min read In the case of coins with a face value greater than $10, a payment is legal tender only for the value of a single coin of that denomination. Where, by virtue of one or more obligations, several sums are payable by one person to another on the same day, the sum of those sums is deemed to be due and payable on that date. Euro banknotes and coins will become legal tender in most euro area countries on 1 January 2002. Although one side of the coins is used for different national marks for each country, all banknotes and coins are legal tender throughout the euro area.

Although some euro area countries do not put 1 cent and 2 cent coins into general circulation (prices in these countries are generally considered to be rounded to a full multiple of 5 cents), 1 cent and 2 cent coins from other euro area countries are still legal tender in these countries. Definition: Legal tender is a legally recognized payment instrument used to meet a financial obligation. In other words, it is an economical means accepted by the legal system. In 1914, the Banking Amendment Act gave legal tender status to the banknotes of any issuer and removed the requirement that banks authorized to issue banknotes must exchange them for gold on demand (the gold standard). Banknotes and coins may be withdrawn from circulation, but remain legal tender. U.S. bank notes issued at any given time are legal tender even after they have been withdrawn from circulation. Canadian $1 and $2 notes are legal tender even if they have been withdrawn and replaced by coins, but Canadian $1,000 notes are legal tender even if withdrawn from circulation in a bank. However, banknotes withdrawn from circulation are usually no longer legal tender, but can be exchanged for common currency at the Bank of England itself or by post.

All issues of New Zealand paper and polymer banknotes issued from 1967 onwards (and $1 and $2 notes until 1993) remain legal tender; However, the 1, 2 and 5 cent coins are no longer used in New Zealand. The sixth series of Swiss banknotes from 1976, recalled by the SNB in 2000, is no longer legal tender, but can be exchanged for regular banknotes until April 2020. The term « legal tender » comes from the Middle French tendre (verbal form), which means « to offer ». The Latin root is tender (stretching), and the meaning of tender as an offer is related to the etymology of the English word « extend » (hold outwards). [5] On 8 November 2016, Prime Minister Narendra Modi announced that the existing INR 500 and INR 1000 notes would no longer be accepted as legal tender in order to combat counterfeiting, tax evasion and the shadow economy. [27] The Reserve Bank of India has described a system whereby holders of such notes can either deposit them into their bank accounts for the full and unlimited value or exchange the notes for new ones, subject to a cap. [28] Legal tender is a type of currency or medium of exchange. It is money that is valid and acceptable to pay off debts that must be recognized in question. New Zealand has a complex history of legal tender.

English law applied either from 6 January 1840 (when the Governor of New South Wales annexed New Zealand by proclamation) or from 14 January 1840 (when Captain Hobson (of the Royal Navy) was sworn in as Lieutenant-Governor of New Zealand). The English Laws Act 1858 later confirmed that English legislation that had been introduced before the 14th century was in force before the 14th century. The New Zealand Act was passed in January 1840 to the extent that it was applicable to local circumstances. The (UK) Coinage Act 1816 therefore applied and British coins were confirmed as legal tender in New Zealand. (Exceptionally, the Reserve Bank (founded in 1934) was not allowed to issue legal tender coins until 1989. The coins were to be issued by the Minister of Finance.) In the People`s Republic of China, the official renminbi currency is unlimited legal tender for all transactions. The law requires that a public entity or individual cannot refuse to use money to settle a public or private domestic debt. [23] Council Regulation (EC) No 974/98 limits the number of coins that may be offered for payment to fifty.

[24] The governments issuing the coins must establish the euro as the sole legal tender. Due to the different legal meanings of the term `legal tender` in different Member States and the possibility for contract law to prevail over legal tender, it is possible for traders to refuse to accept euro banknotes and coins in certain euro area countries (the Netherlands, Germany, Finland and Ireland). [25] National legislation may also impose restrictions on the maximum amounts that can be paid per coin or banknote. In general, Canadian dollar bank notes issued by the Bank of Canada and coins issued under the Royal Canadian Mint Act are legal tender in Canada. However, business transactions may be lawfully conducted in the manner agreed upon by the parties involved in the transactions. For example, convenience stores may reject $100 bills if they feel it puts them at risk of being counterfeited. However, official policy suggests that retailers should assess the impact of this approach. In the event that no mutually acceptable form of payment can be found for the offer, the parties concerned should seek legal advice. [21] Bank of England banknotes are legal tender in England and Wales and are issued in denominations of £5, £10, £20 and £50.