Sometimes currency issues such as commemorative coins or transfer bills may be issued that are not intended for public circulation but are nonetheless legal tender. An example of such currency is "Maundy money. Some currency issuers, particularly the Scottish banks, issue special commemorative banknotes which are intended for ordinary circulation. As well, some standard coins are minted on higher-quality dies as 'uncirculated' versions of the coin, for collectors to purchase at a premium; these coins are nevertheless legal tender. Some countries issue precious-metal coins which have a currency value indicated on them which is far below the value of the metal the coin contains: these coins are known as "non-circulating legal tender" or "NCLT".
Status by country
In "Australia, the creation of legal tender, in the form of notes and "base metal coins, is the exclusive right of the Commonwealth (Federal) Government. According to section 115 of the "Australian Constitution, "A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts." Under this provision the "Perth Mint, owned by the "Western Australian Government, still produces gold and silver coins with legal tender status, the "Australian Gold Nugget and "Australian Silver Kookaburra. These, however, although having the status of legal tender, are almost never circulated or used in payment of debts, and are mostly considered "bullion coins.
Australian notes are legal tender for all amounts, as established by the Reserve Bank Act 1959. Under the provisions of the Currency Act 1965 Australian coins intended for general circulation, which are now produced at the "Royal Australian Mint in "Canberra, are also legal tender, but only for the following amounts:
- not exceeding 20¢ if 1¢ and/or 2¢ coins are offered;
- not exceeding $5 if any of 5¢, 10¢, 20¢ and 50¢ coins are offered;
- not exceeding 10 times the face value if the coins offered are greater than 50¢ up to and including $10;
- to any value for coins of other denominations above $10.
The one cent and two cent coins have been "withdrawn from circulation since February 1992 but remain legal tender.
Although the Reserve Bank Act 1959 and the Currency Act 1965 establishes that Australian banknotes and coins have legal tender status, Australian banknotes and coins do not necessarily have to be used in transactions and refusal to accept payment in legal tender is not unlawful. It appears that a provider of goods or services is at liberty to set the commercial terms upon which payment will take place before the ‘contract’ for supply of the goods or services is entered into. If a provider of goods or services specifies other means of payment prior to the contract, then there is usually no obligation for legal tender to be accepted as payment. This is the case even when an existing debt is involved. However, refusal to accept legal tender in payment of an existing debt, where no other means of payment/settlement has been specified in advance, conceivably could have consequences in legal proceedings.
"Australia Post prohibits the sending of coins or banknotes, of any country, except via Registered Post.
In 1901, notes in circulation in "Australia consisted of bank notes payable in gold coin and issued by the trading banks, and Queensland Treasury notes. Bank notes circulated in all States except "Queensland, but were not legal tender except for a brief period in 1893 in "New South Wales. There were, however, some restrictions on their issue and other provisions for the protection of the public. Queensland Treasury notes were issued by the Queensland Government and were legal tender in that state. Notes of both categories continued 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 notes as money, and the Bank Notes Tax Act 1910 imposed a tax of ten per cent, per annum, on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed".["citation needed] These Acts effectively put an end to the issue of notes by the trading banks and the Queensland Treasury. 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".
In general, "Canadian dollar banknotes issued by the "Bank of Canada and coins issued under the authority of the "Royal Canadian Mint Act are legal tender in "Canada. However, commercial transactions may legally be settled in any manner agreed by the parties involved with the transactions. 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.
As outlined in the Currency Act, there is a limit to the value of a transaction for which one may use only coins. A payment in coins is a legal tender for no more than the following amounts for the following denominations of coins:
- forty dollars if the denomination is two dollars or greater but does not exceed ten dollars;
- twenty-five dollars if the denomination is one dollar;
- ten dollars if the denomination is ten cents or greater but less than one dollar;
- five dollars if the denomination is five cents; and
- twenty-five cents if the denomination is one cent.
In the case of coins of a denomination greater than ten dollars, a payment is a legal tender for no more than the value of a single coin of that denomination. Where more than one amount is payable by one person to another on the same day under one or more obligations, the total of those amounts is deemed to be one amount due and payable on that day.
In the People's Republic of China, the official currency "Renminbi serves as the unlimited legal tender for all transactions. It is by law that any public institution or individual must not refuse using the currency to settle public or private domestic owing.
"Euro "coins and "banknotes became legal tender in most countries of the "Eurozone on January 1, 2002. Although one side of the coins is used for different national marks for each country, all coins and all banknotes are legal tender throughout the "eurozone. Therefore, it is possible to find "Irish euro coins in "Greece and "Finnish euro coins in "Portugal, for instance. Although some eurozone countries do not put 1 cent and 2 cent coins into general circulation (prices in those countries are by general understanding always "rounded to whole multiples of 5 cent), 1 cent and 2 cent coins from other eurozone countries remain legal tender in those countries.
Council Regulation (EC) No 974/98 limits the number of coins that can be offered for payment to fifty. Governments that issue the coins must establish the euro as the only legal tender. Due to variations on the legislative meaning of legal tender in various member states and the ability of contract law to overrule the status of legal tender, it is possible for merchants to choose to refuse to accept euro banknotes and coins within specific countries within the Eurozone (the Netherlands, Germany, Finland and Ireland). National laws may also impose restrictions as to maximal amounts that can be settled by coins or notes.
Legal tender was enacted the first time in 1870 for all notes and coins of the "Banque de France. Anyone refusing such monies for their whole value would be prosecuted (French Penal Code art. R. 642-3).
Republic of Ireland
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."
The Decimal Currency Act, 1970 governed legal tender prior to the adoption of the euro and laid down the analogous provisions as in United Kingdom legislation (all inherited from previous "British law), namely: coins denominated above 10 pence became legal tender for payment not exceeding 10 pounds, coins denominated not more than 10 pence became legal tender for payment not exceeding 5 pounds, and bronze coins became legal tender for payment not exceeding 20 pence.
The "Indian rupee is the de facto legal tender currency in "India. The Indian rupee is also legal tender in "Nepal and "Bhutan, but the "Nepalese rupee and "Bhutanese ngultrum are not legal tender in India. Both the Nepalese rupee and Bhutanese ngultrum are pegged with the Indian rupee.
The Indian rupee used to be an official currency of other countries, including the "Straits Settlements (now "Singapore and parts of "Malaysia), "Kuwait, "Bahrain, "Qatar, and the "Trucial States (now the "UAE).
In 1837, the Indian rupee was made the sole official currency of the Straits Settlements, as it was administered as a part of India. In 1845, the British replaced the Indian rupee with the "Straits dollar after administration of the Straits Settlements separated from India earlier in that same year.
After "partition of India and Pakistan in 1947, the "Pakistani rupee came into existence, initially using Indian coins and Indian currency notes simply overstamped with the word "Pakistan". New coins and banknotes were issued in 1948.
The Gulf rupee, also known as the "Persian Gulf rupee (XPGR), was introduced by the "Government of India as a replacement for the Indian rupee for circulation exclusively outside the country with the "Reserve Bank of India Amendment Act of 1 May 1959. This creation of a separate currency was an attempt to reduce the strain put on India's foreign reserves by gold smuggling.
Two states, Kuwait and Bahrain eventually replaced the Gulf rupee with their own currencies (the "Kuwaiti dinar and the "Bahraini dinar) after gaining independence from Britain in 1961 and 1965, respectively.
On 6 June 1966, India devalued the rupee. To avoid following this devaluation, several of the states using the rupee adopted their own currencies. Qatar and most of the Trucial States adopted the "Qatar and Dubai riyal, whilst Abu Dhabi adopted the "Bahraini dinar. Only Oman continued to use the Gulf rupee until 1970, with the government backing the currency at its old peg to the pound. Oman later replaced the Gulf rupee with its own "rial in 1970.
On November 8, 2016, "Prime Minister "Narendra Modi announced that existing "INR 500 and INR 1000 banknotes would no longer be accepted as legal tender with a view to curb counterfeiting, tax evasion and the "parallel economy.The Reserve Bank of India outlined a scheme for holders of such banknotes to either deposit them into their bank accounts for full, unlimited value, or to exchange the banknotes for new, subject to a cap. 
"New Zealand has a complex history of legal tender. English law applied, as applicable to local circumstances, from either 6 January 1840, when the Governor of New South Wales by proclamation annexed New Zealand, or from 14 January 1840 when Captain Hobson Royal Navy was sworn in as Lieutenant-Governor. The English Laws Act 1858 subsequently confirmed that English legislation passed prior to 14 January 1840 was and had been the law of New Zealand, as applicable to local circumstances. The (UK) Coinage Act 1816 therefore applied and British coins were confirmed as legal tender in "New Zealand. Unusually, until 1989, the Reserve Bank did not have the right to issue coins as legal tender. Coins had to be issued by the "Minister of Finance.
The history of bank notes was considerably more complex. In 1840, the "Union Bank started issuing bank notes under provisions of British law, but these were not automatically legal tender.
In 1844, ordinances were passed making the "Union Bank banknotes legal tender and authorising the government to issue debentures in small denominations, thus creating two sets of legal tender. These debentures were circulated but were traded at a discount to their face value because of distrust of the colonial government by the settler population. In 1845, the Ordinance was disallowed by the British Colonial office and they were recalled, not without first causing a panic among holders of the debentures.
In 1847, the "Colonial Bank of Issue became the only issuer of legal tender. In 1856, however the "Colonial Bank of Issue was disbanded and through the Paper Currency Act 1856, the Union Bank was confirmed once again as an issuer of legal tender. The Act also authorised the "Oriental Bank to issue legal tender but this bank ceased operations in 1861.
Between 1861 and 1874, a number of other banks including the "Bank of New Zealand, "Bank of New South Wales, "National Bank of New Zealand and Colonial Bank of New Zealand were created by Acts of Parliament and authorised to issue bank notes backed by gold, however these notes were not legal tender.
The 1893 Bank Note Issue Act allowed the government to declare a bank's right to issue legal tender. This enabled the government to make such a declaration to assist the "Bank of New Zealand when in 1895 the bank encountered financial difficulties that could have led to its failure.
In 1914, the Banking Amendment Act gave legal tender status to bank notes from any issuer and removed the requirement that banks authorised to issue bank notes must redeem them on demand for gold (the "gold standard).
In 1933, the Coinage Act created a specific New Zealand coinage and removed legal tender status from British coins. In the same year the "Reserve Bank of New Zealand was established. The bank was given a monopoly on the issue of legal tender. The Reserve Bank also provided a mechanism through which the other issuers of legal tender could phase out their bank notes. These banknotes were convertible into British legal tender on demand at the Reserve Bank and remained so until the 1938 Sterling Exchange Suspension Notice that suspended provisions of a 1936 amendment of the 1933 Reserve Bank of New Zealand Act.
In 1964, the Reserve Bank of New Zealand Act restated that only notes issued by the Reserve Bank were legal tender. The Act also ended the right of individuals to redeem their bank notes for coin, effectively ending the distinction between coin and notes in New Zealand. The Act came into force in 1967 establishing as legal tender all "New Zealand dollar five dollars banknotes and greater, all decimal coins, the pre-decimal sixpence, the "shilling, and the "florin. Also passed in 1964 was the Decimal Currency Act, which created the basis for a decimal currency, introduced in 1967.
As of 2005, banknotes were legal tender for all payments, and $1 and $2 coins were legal tender for payments up to $100, and 10c, 20c, and 50c silver coins were legal tender for payments up to $5. These older style silver coins were legal tender until October 2006, after which only the new 10c, 20c and 50c coins, introduced in August 2006, are legal.
The "Norwegian krone (NOK) is legal tender in "Norway according to the Central Bank ("Norwegian: Sentralbankloven) of 1985-05-24, However, no-one is obliged to accept more than 25 coins of each denomination (of which currently 1, 5, 10 and 20 NOK denominations are in common circulation).
Singapore and Brunei
"Singapore and "Brunei have a Currency Interchangeability Agreement since 12 June 1967. Under the agreement, "Singapore dollar and "Brunei dollar are exchangeable at par without charge in both countries. As such, the currency of one country is accepted in the other country as "customary tender".
Switzerland and Liechtenstein
The "Swiss franc is the only legal tender in "Switzerland. Any payment consisting of up to 100 Swiss coins is legal tender; banknotes are legal tender for any amount.
The sixth series of Swiss "bank notes from 1976, recalled by the National Bank in 2000, is no longer legal tender, but can be exchanged in banks for current notes until April 2020.
The Swiss franc is also the legal tender of the Principality of "Liechtenstein, which is joined to Switzerland in a "customs union.
The Swiss franc is also the currency used for administrative and accounting purposes by most of the numerous international organisations that are headquartered in Switzerland.
The "New Taiwan dollar issued by the "Central Bank of the Republic of China (Taiwan) is legal tender for all payments within the territory of the "Republic of China, "Taiwan. However, since 2007, candidates to become civil servants in "elections in the Republic of China may no longer pay any "deposit in coinage.
Series 2 banknotes first issued in 1925 during the reign of "Rama VI and continuing into the reign of "Rama VII added the legend,
Promise to pay (silver to) bearer on demand in (silver) currency of Siam;
later changed in 1928 to be in line with The Currency Act, B.E. 2471 to
This note is legal tender ("literal translation, silver in payment of debt) according to law.
The front has a "guilloche design with twelve rays, and the back, depictions of the "Royal Ploughing Ceremony. These were printed in 6 denominations — 1, 5, 10, 20,100 and 1000 baht—in two types printed by "De La Rue of London, England.
Legal tender is solely for the guaranteed settlement of debts and does not affect any party's right of refusal of service in any transaction.
In the 19th century, gold coins were legal tender to any amount, but silver coins were not legal tender for sums over 2 pounds nor bronze for sums over 1 "shilling. This provision was retained in revised form at the introduction of "decimal currency, and the "Coinage Act 1971 laid down that coins denominated above 10 pence became legal tender for payment not exceeding 10 pounds, non-bronze coins denominated not more than 10 pence became legal tender for payment not exceeding 5 pounds, and bronze coins became legal tender for payment not exceeding 20 pence.
Throughout the "United Kingdom, coins valued "1 pound, "2 pounds, and "5 pounds "Sterling are legal tender in unlimited amounts. "Twenty pence pieces and "fifty pence pieces are legal tender in amounts up to 10 pounds; "five pence pieces and "ten pence pieces are legal tender in amounts up to 5 pounds; and "pennies and "two pence coins are legal tender in amounts up to 20 pence. In accordance with the Coinage Act 1971, "gold sovereigns are also legal tender for any amount. Although it is not specifically mentioned on them, the face values of gold coins are 50p; £1; £2; and £5, a mere fraction of their worth as bullion. Five pound coins, although legal tender, are intended as souvenirs and are almost never seen in circulation.
"Maundy money is legal tender but may not be accepted by retailers and is worth much more than face value due to its rarity value and silver content.
"Bank of England notes are legal tender in "England and Wales and are issued in the denominations of £5, £10, £20 and £50. They can always be redeemed at the Bank of England even if discontinued. Banknotes issued by Scottish and Northern Irish banks are not legal tender anywhere but are widely accepted with agreement between parties. Thus legal tender in Scotland is limited to coin.
Before the "Civil War (1861 to 1865), silver coins were legal tender only up to the sum of $5. Before 1853, when U.S. silver coins were reduced in weight 7%, coins had exactly their value in metal (from 1830 to 1852). Two silver 50 cent coins had exactly $1 worth of silver. A gold U.S. dollar of 1849 had $1 worth of gold. With the flood of gold coming out of the California mines in the early 1850s, the price of silver rose (gold went down). Thus, 50 cent coins of 1840 to 1852 were worth 53 cents if melted down. The government could increase the value of the gold coins (expensive) or reduce the size of all U.S. silver coins. With the reduction of 1853, a 50-cent coin now had only 48 cents of silver. This is the reason for the $5 limit of silver coins as legal tender; paying somebody $100 in the new silver coins would be giving them $96 worth of silver. Most people preferred bank check or gold coins for large purchases.
During the early "American Civil War, the federal government first issued United States Notes (the first "greenback notes) which were not redeemable in gold and silver coins but could be used to pay "all dues" to the federal government. Since land purchases and duties on imports were payable only in gold or the new "Demand Notes, the Demand Notes were bought by importers and land speculators for about 97 cents on the gold dollar and never lost value. 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. The value of Legal Tender Greenbacks swung wildly but trading was from 85 to 33 cents on the gold dollar.
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. The 1861 Demand Notes were a huge success but robbed the customs house of much needed gold coin (interest on most bonds back then was paid in gold). A money-strapped Congress which had to pay for the war eventually adopted the "Legal Tender Act of 1862, issuing "United States Notes backed only by treasury securities, and compelled the people to accept the new notes at a discount; prices rose except for those who had gold and/or silver coins.
Following the Civil War, paper currency was disputed as to if it must be accepted as payment. In 1869, Hepburn v. Griswold found that Henry Griswold would not have to accept paper currency because it could not truly be "legal tender" and was unconstitutional as a legally enforceable means to pay debts. This led to the Legal Tender Cases in 1870, which overturned the previous ruling and established the paper currency as constitution and proper legal tender and must be accepted in all situations.
With the 1884 Supreme Court ruling in "Juilliard v. Greenman, the "Supreme Court ruled that Congress had the right to issue notes to be legal tender for the payment of public and private debt. Legal-tender notes are treasury notes or banknotes that, in the eyes of the law, must be accepted in the payment of debts." The ruling in the "Legal Tender Cases (which include Juilliard v. Greenman) led to 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. Foreign gold or silver coins are not legal tender for debts.
There is no federal law stating that a private business, a person, or an organization must accept currency or coins for payment. Private businesses are free to create their own policies on whether or not they accept cash, unless there is a specific state law which says otherwise. For example, a bus line may prohibit payment of fares in cents or dollar bills. In addition, movie theaters, convenience stores, and gas stations may refuse to accept large denomination currency as a matter of policy or safety.
The Government announced demonetisation following almost 500% inflation in the country. People of the country were given 3 days to get rid of the 100 Bolivar notes (most widely used currency) post the introduction of new note of higher denominations.["citation needed]
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- Paul M. Horvitz, Monetary Policy and the Financial System, p. 14, Prentice-Hall, 3rd ed. (1974).
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- Reserve Bank Act 1959
- CURRENCY ACT 1965
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- Article 32 of the Civil Servants Election And Recall Act.
- พระราชบัญญัติเงินตราพุทธศักราช ๒๔๗๑ (PDF) (in Thai). ราชกิจจานุเบกษา เล่ม ๔๕ หน้าที่ ๒๕ - ๓๙ วันที่ ๑๕ เมษายน พ.ศ. ๒๔๗๑. Retrieved 12 September 2012.
- "Banknotes, Series 2". Banknotes > History and Series of Banknotes >. "Bank of Thailand. February 23, 2012.
The design was printed on both sides....
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- Text of the Coinage Act 1971 as in force today (including any amendments) within the United Kingdom, from "legislation.gov.uk Last accessed:3 May 2011
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- Hammond, Bray. Banks and Politics in America. Princeton: Princeton University Press, 1991. pp. 108-109
- Allen, Larry. The Encyclopedia of Money. Santa Barbara: ABC CLIO, 2009. pp. 250-251
- Zywicki, Todd. "Article I, Section 8" in The Heritage Guide to the Constitution. Regnery Publishing, 2014. p. 147
|""||"Wikisource has the text of the 1920 "Encyclopedia Americana article Legal Tender.|
- The Royal Mint - UK Legal Tender Guidelines
- The Royal Mint - Legal tender status of stamps in the UK
- Act to authorize the Issue of United States Notes, and for the Redemption or Funding thereof, and for Funding the Floating Debt of the United States. 37th Congress, 2d Session, Ch. 33, 12 Stat. 345. [Legal Tender Act]
- Act to authorize an additional Issue of United States Notes, and for other purposes. 37th Congress, 2d Session, Ch. 142, 12 Stat. 532 [Second Legal Tender Act]
- Act to provide Ways and Means for the Support of the Government. 37th Congress, 3d Session, Ch. 73, 12 Stat. 709 [Third legal Tender Act]