Legal Tender Laws
Under U.S. federal law, U.S. dollar cash is a valid and legal offer to pay past debts when offered to a creditor. In contrast, federal law does not require a vendor to accept federal currency or coins as payment for goods or services exchanged at the same time. Therefore, private companies can formulate their own policies on whether or not to accept cash, unless state law provides otherwise. [3] [4] In 1847, the Colonial Bank of Issue became the sole issuer of legal tender. In 1856, however, the Colonial Bank of Issue was dissolved; and the Paper Currency Act of 1856 reconfirmed the legal tender of the Union Bank. The law also allowed the Eastern Bank to issue legal tender, but this bank ceased operations in 1861. Cheques and credit cards are not really legal tender. They are simply legal tender that you have in your bank account or are available through the credit card company. The legal tender of the United States, the U.S.
dollar, is considered legal for use in many other countries. Often, countries where less of their own currency is available accept national legal tenders such as dollars and euros. According to monetary law, there are limits to the value of a transaction for which only coins are used. [22] A coin payment is legal tender for a maximum of the following amounts for the following unit denominations: Legal tender is the currency which, under national law, is a valid payment of debts, taxes or charges. In 1964, the Reserve Bank of New Zealand Act stipulated that only notes issued by the Reserve Bank were legal tender. The Act also ended the right of individuals to redeem their banknotes for coins, thereby eliminating the distinction between coins and banknotes in New Zealand. The Act came into force in 1967 and established as legal tender all banknotes of five dollars in New Zealand dollars and above, all decimal coins, predecimal pence, shilling and guilder. The Decimal Currency Act, which created the basis for a decimal currency introduced in 1967, was also passed in 1964. The right of a trader in many countries to refuse to do business with a person means that a potential buyer cannot force a purchase solely by presenting legal tender, as legal tender should only be accepted for debts already incurred. 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 prosecution actually argued in court that the 90% silver Liberty coins were a counterfeit of the usual twenty-five cent coin.
The Associated Press reported: “Federal prosecutors successfully argued that von NotHaus was actually trying to issue the silver coins as U.S. currency. Liberty dollars, which were available in denominations of 5, 10, 20, and 50, also included a dollar sign, the word “dollar,” and the motto “Trust in God,” similar to “In God We Trust” that appears on U.S. coins. A jury did find him guilty, suggesting the degree of influence on the judicial system to achieve the outcome prosecutors wanted. Gold and silver coins are not legal tender in the United States, but some states have lobbied for that to change. Precious metals can be exchanged for legal tender in some pawnshops and elsewhere, but are not legal tender per se. Cryptocurrency is gaining popularity and many are calling for certain types, such as Bitcoin, to be legal tender. Some countries are even taking steps to convert their national currency into cryptocurrency, such as Venezuela`s Petro.
Legal tender is a form of money that courts must recognize as a satisfactory payment for monetary debts. [1] Each jurisdiction determines what is legal tender, but it is essentially anything that extinguishes the debt when it is offered (“offered”) to pay a debt. The creditor is not obliged to accept the payment offered, but the act of offering payment in legal tender releases the debt. With the Supreme Court`s 1884 decision in Juilliard v. Greenman, the Supreme Court ruled that Congress had the right to issue legal tender banknotes for the payment of public and private debts. Treasury bills or banknotes are legal tender which, in the eyes of the law, must be accepted when paying debts. [45] The legal tender decision (including Juilliard v. Greenman) prompted subsequent courts to “support the federal government`s invalidation of gold clauses in private contracts in the 1930s.” [46] In the past, legal tender laws have effectively supplanted all alternative currencies. There are very few companies in the U.S. that accept anything other than the U.S.
dollar. Before Bitcoin`s recent surge in popularity, there was virtually none. Indeed, it becomes extremely difficult to use the US banking system and make more complex transactions if you do not use dollars. You can`t pay taxes without using them. You won`t stay in business very long if you don`t pay taxes. Before the Civil War (1861 to 1865), silver coins were legal tender only up to a maximum of US$5. Before 1853, when American silver coins were weighed by 7%, the coins had exactly their value in metal (from 1830 to 1852). Two 50-cent silver coins had silver with an exact value of $1.