Filed Under: Cash and cash replacement, Money

Who cares what is or isn't legal tender?

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I don’t know why people in the virtual currency community focus on making digital money “legal tender”. Many people don’t know what it means and it really doesn’t matter anyway.

Around the world, central banks seem to continue to invest in printing “paper” money (I say “paper” because some of it is plastic now) and trying harder and harder to make it difficult to counterfeit. It’s hard to tell whether it’s working or not.

A counterfeiter passed his time running off dud £20 notes on a home printer and colouring them in with pens to make them look authentic, a court has heard.

[From Forger coloured fake 20 notes with pen | Herald Scotland]

Who would be fooled by that! Well… I can’t say for certain that I could tell whether a Scottish banknote is a forgery or not and I’m sure that goes for plenty of people around Woking. Which doesn’t really matter, since you never see them around here. Mind you, there are places in the world where the ability to spot foreign-currency forgeries is far more important.

Zimbabwe must be the only place in the world to have eight currencies as legal tender – none of them its own.

[From BBC News – Zimbabwe’s multi-currency confusion]

Incidentally, talking about foreign currency and legal tender, I noticed a story on ITV the other day about a schoolboy who was chucked off a Welsh bus for trying to pay with a Scottish banknote. The bus company apologised.

Scottish currency is legal tender in the UK and it should have been accepted on our buses as payment for the journey he was making – FIRST CYMRU SPOKESPERSON

[From Teen was left to walk home after bus drivers refused Scottish bank note | Wales – ITV News]

But this is incorrect. Scottish banknotes are not legal tender in England or, for that matter, Wales. Only Bank of England notes are legal tender in England and Wales. Scottish banknotes are not legal tender anywhere, even in Scotland. In fact, no banknotes are legal tender in Scotland. None.

Scottish Bank notes are not Legal Tender, not even in Scotland. In fact, no banknote whatsoever (including Bank of England notes!) qualifies for the term ‘legal tender’ north of the border and the Scottish economy seems to manage without that legal protection.

[From Scottish Banknotes Legal Position – The Committee of Scottish Bankers (CSCB)]

I’ve been to Scotland, and I’ve seen people buying things in shops using cash, so not having legal tender does not seem to be much of  a barrier to trade or industry. This, to my mind, shows how uninteresting the issue of “legal tender” really is in the modern age. From now on, I will automatically assume that any article that talks about making digital currency legal tender is written by someone who doesn’t understand it.

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