A merchant`s right to refuse to do business with a person in many jurisdictions means that a potential buyer cannot force a purchase solely by presenting legal tender, since legal tender only has to be accepted for debts already incurred. Demonetization is the act of depriving a monetary unit of its status as legal tender. It occurs whenever there is a change in national currency: the current form(s) of money are or are withdrawn from circulation and withdrawn, often to be replaced by new notes or coins. Sometimes a country completely replaces the old currency with a new currency. The new Taiwanese dollar issued by the Central Bank of the Republic of China (Taiwan) is legal tender for all payments in the territory of the Republic of China, Taiwan. [33] However, since 2007,[34] candidates who become officials in elections in the Republic of China are no longer allowed to pay a deposit in the form of documents. [35] The Decimal Currency Act 1970 regulated legal tender before the introduction of the euro and laid down provisions similar to those of UK law (all of which were inherited from the old UK law), namely: coins with a volume of more than 10 pence were legal tender for a payment not exceeding GBP 10, Coins with a volume not exceeding 10 pence became legal tender for a payment not exceeding £5, and bronze coins became legal tender for payment of up to 20 pence. Previously, companies had to bring or deposit checks at the bank or post office, but it`s easier to deposit checks nowadays thanks to a more efficient image-based clearing system. Coins and banknotes are no longer legal tender if new banknotes of the same currency replace them or if a new currency is introduced that replaces the previous one. [6] Examples: You may have heard someone in a store say, “But it`s legal tender!” Most people think this means that the store has to accept the payment form. But this is not the case. However, there is also the very little-known issue of cheque law – as described below. The main purpose of this law is to ensure national acceptance of the U.S.
currency in accordance with constitutional language, which reserves to Congress the power to create a single currency that has the same value across the United States. While the law states that the United States money is legal tender and can be accepted for the payment of debts, it does not require the acceptance of cash payments, nor does it provide that the acceptance of cash cannot be restricted. [48] Green money is legal tender, but may not be accepted by retailers and is worth much more than its face value due to its rarity and silver content. In 1933, the Coinage Act approved a specific New Zealand currency and removed the legal tender status of British coins. In the same year, the Reserve Bank of New Zealand was established. The bank obtained a monopoly on the issuance of legal tender. The Reserve Bank has also provided a mechanism for other legal tender issuers to phase out their notes. These notes could be converted into British legal tender at the request of the Reserve Bank and remained so until the Sterling Stock Exchange Suspension Notice of 1938, which suspended the provisions of an amendment to the Reserve Bank of New Zealand Act 1933 of 1936. In 1914, the Banking Amendment Act gave an issuer`s banknotes the status of legal tender and eliminated the requirement that banks authorized to issue banknotes must exchange them for gold on demand (the gold standard). To understand our policy against the use of cheques as a means of payment wherever possible, it is instructive to look back at how they have always been defined. In 1901, banknotes in circulation in Australia consisted of banknotes payable in gold coins and issued by commercial banks, and Queensland Treasury notes.
Banknotes circulated in all states except Queensland, but were not legal tender, except for a short time in New South Wales in 1893. However, there have been some restrictions on their issuance and other provisions to protect the public. Queensland Treasury bills were issued by the Queensland Government and were legal tender in that state. Banknotes of both categories were in circulation until 1910, when the Commonwealth Parliament passed the Australian Notes Act 1910 and the Bank Notes Tax Act 1910. The Australian Notes Act 1910 prohibited the circulation of state banknotes as currency, and the Bank Notes Tax Act 1910 imposed a tax of 10% per annum on “all notes issued or reissued by a Commonwealth bank after the coming into force of this Act and not redeemed”. [18] [19] These laws effectively end the issuance of banknotes by commercial banks and the Queensland Department of Finance. The Reserve Bank Act of 1959 expressly prohibits individuals and states from issuing “an invoice or note for the payment of money payable to the holder upon request and intended for circulation.” [20] Some central banks demonetize banknotes after the revocation of legal tender, which means that they cease to honor their face value. In other words, demonetized banknotes lose their value. The Banknotes Act of 1893 allowed the government to declare a bank`s right to issue legal tender. This allowed the government to make such a statement to support the Bank of New Zealand when the bank encountered financial difficulties in 1895 that could have led to its bankruptcy. 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, commercial transactions may be legally carried out in any manner agreed by the parties involved in the transactions.
For example, convenience stores may reject $100 worth of banknotes if they believe they are at risk of counterfeiting. 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] In fact, companies have the full right to decide which payment methods they accept. Merchants can legally refuse payments of any kind – including checks – and accept only what they deem convenient. This note is legal tender (literal translation, money in the payment of debts) according to the law. In general, legal tender can take two fundamental forms. A government can simply ratify a market-oriented commodity currency, such as gold, as legal tender and agree to accept tax payments and perform contracts denominated in that commodity. Alternatively, a government may declare a counterfeit commodity or a worthless token that is legal tender, which then takes on the characteristics of fiat currency. According to the Economic and Monetary Union of the Republic of Ireland Act 1998, which replaced the legal tender provisions reinstated in Irish law by virtue of earlier British Decrees, “no person other than the Central Bank of Ireland and persons designated by order of the Minister shall be required to accept more than 50 coins denominated in euros or cents in a single transaction”. Banknotes and coins may be withdrawn from circulation, but remain legal tender.
U.S. banknotes 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 they are withdrawn from circulation when they arrive at a bank. However, Bank of England banknotes that are withdrawn from circulation are generally not legal tender, but remain redeemable for current currency at the Bank of England itself or by post. All paper and polymer issues of New Zealand banknotes issued from 1967 onwards (and $1 and $2 notes until 1993) are still legal tender; However, the 1, 2 and 5 cent coins are no longer used in New Zealand. However, there are a few exceptions. In 2018, in the face of devastating hyperinflation, Venezuelan President Nicolas Madura ordered all federal institutions to accept a new electronic currency, the Petro, as legal tender. The Venezuelan Petro is centrally controlled by the Venezuelan government, based on its own assessment of the value of its natural resources.