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The above is strictly not true, the Anglo-Saxon definition is quite different and narrower, it means that a debtor cannot reject payment of an existing loan in the legal tender of a nation.In other words, it does not necessarily require its use for a prospective transaction or as a unit of account.
Thus,any official medium of payment recognized by law that can be used to extinguish a public or private debt is a legal tender.
The UK case-study
- The bank of England is the only bank authorized bank to issue bank notes in England and Wales and its notes are legal tenders in both
- In Scotland and Northern Ireland,Bank notes are issued by seven retail banks, provided there retail banks keep equivalent assets with the bank of England
- Neither the bank notes of England nor those issued by the private retail banks in Scotland and Northern Ireland are legal tenders in Scotland or Northern Ireland. There are no bank notes that are legal tenders in Scotland and Northern Ireland.
How does this relate to bitcoin as a currency?
It does emphasize the point that all currencies are accepted largely as a matter of convention-not necessarily by law.If everyone accepts bitcoin as a currency,it makes little difference if its legal status is defined or not.
The converse is also true, that a legal status does not necessarily make a currency effective,take Venezuela dollar as an example,you will not want to make your transactions in it,despite it being a legal tender in Venezuela.
What are your thoughts on whether the government declares bitcoin as a legal tender or not.
p.s: I do not argue that declaring bitcoin as a legal tender isn't a good thing.
Credit:
https://courses.unic.ac.cy/pluginfile.php/579833/mod_resource/content/23/1.%20A%20brief%20history%20of%20money.pdf
https://www.investopedia.com/terms/l/legal-tender.asp
