WHEN BANK NOTES ARE NOT LEGAL TENDERS:AN ARGUMENT FOR BITCOINS-UK case-study

[Danielosad]

Common belief is that ‘legal tender’ means ‘you are required to use this currency’, and by this,it gains value.
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.
  

It is therefore by Common Convention that bank notes are used as a means of settling financial transactions in Scotland and Northern Ireland (since the notes are not legal tenders).
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

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[Ozero]

The phrase "legal tender" does not mean that all subjects of financial calculations must use this means of payment in their activities. It only means that this means of payment is approved by the state for circulation on the territory of this state. Everyone has the right to choose which legal means of payment to use. If the state legalizes cryptocurrency and it becomes legal means of payment, this does not mean that everyone should use it after that, but it means that it is likely to be used at its own discretion.

[davis196]

This doesn't have anything to do with bitcoin.
The 'legal tender' thing is connected only with fiat money.Bitcoin doesn't have to be a legal tender,in order to have value.BTC is a digital asset backed by it's blockchain.Fiat money can't be decentralized and their supply can't be limited(because of fake paper money or central bank policies).

[CoinJanitor]

As more 1st world countries move to cashless societies where physical money use is discouraged or not allowed it will improve the adoption rates for bitcoin as digital money as people will be less used to actually exchanging physical cash.

[avikz]

This doesn't have anything to do with bitcoin.
The 'legal tender' thing is connected only with fiat money.Bitcoin doesn't have to be a legal tender,in order to have value.BTC is a digital asset backed by it's blockchain.Fiat money can't be decentralized and their supply can't be limited(because of fake paper money or central bank policies).

Why do you think bitcoin doesn't have to be a legal tender? Obviously it doesn't have to similar to what fiat money is, but don't you think that being a legal tender, the value of bitcoin would further appreciate and show signs of stability? We have seen a lot of fluctuations in the value of bitcoin since its inception, mostly positive but we have also see a huge depreciation as well. Don't you think that being a legal tender will help bitcoin stabilize over time and the adoption rate would also increase?

Unlike fiat money, bitcoin doesn't have a backing asset and that's why the stamp of legal tender is very necessary for bitcoin. Just think, if a currency is showing immense value without being a legal tender, how much value it would have if it becomes a legal tender. The possibility is unlimited and unrestricted. 

[_Miracle]

" WHEN BANK NOTES ARE NOT LEGAL TENDERS:AN ARGUMENT FOR BITCOINS-UK case-study  "

Why are you shouting Danielosad? Use your inside forum voice ;-)

There may come a time when governments adopt a cryptographically secured digital coin as their legal tender but bitcoin is decentralized and stands alone
as a medium of exchange.

[magneto]

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.

You're absolutely spot on on this.

There is nothing that is in the way of people using bitcoin as a means of transaction, even if it isn't recognised as legal tender within a country. Just because something isn't legal tender doesn't mean that it can't be used to transact, as long as the two parties involved are happy, then the transaction can still go through without any legal ambiguities.

I find that a lot of people often get confused about this fact, and as a result, believe that bitcoin is somehow unlawful as a currency and that deters them from using it. That's an absurd assumption, and it's obviously not true. The chances of bitcoin being legal tender in any countries any time soon is virtually zero, but yet it can serve as a form of currency and store of value nonetheless.

[Crypdon]

It doesn't have to be legal tender in order to be accepted, but if bitcoin was made legal tender then sellers cannot refuse to take it. As it's a complicated technology for some, it won't have that status, but it can still be accepted as an option

[gentlemand]

It doesn't have to be legal tender in order to be accepted, but if bitcoin was made legal tender then sellers cannot refuse to take it. As it's a complicated technology for some, it won't have that status, but it can still be accepted as an option

Sellers absolutely can refuse legal tender. I've only had a £50 note three times in my entire life. I could not spend a single one of them. They were all refused.

The only time it can't be refused is when someone is suing you for non payment and you're offering legal tender to settle it. Anything other than that is basically discretionary.

[akihikohideaki]

In this case I assume that there is a need for government intervention, even though Bitcoin can run without a third party. Because this is the core of the problem that has become the topic of conversation.
Apart from all that, the government has the right to regulate and protect bitcoin consumers.
We need to understand that government regulations for bitcoin are legitimate payment instruments or will not determine the direction of Bitcoin in the future.