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Legal tender

Legal tender is a legal concept but often used to refer to currencies issued under the authority of a government, and acknowledged by national law as a valid means of payment for settling debts. Practically, legal tender is the conventional currency (national currency) circulating in a country or in a given economy, which is accepted by the government as means to pay taxes 1.

If a debtor pays with legal tender, the payment must be accepted by the creditor in settlement of a debt. And the debtor will have a very good defence in court if sued for non-payment.

Complementary or Community currencies comprise all money that lie outside the realm of legal tender even if some allow local taxes to be settled with the local currency (as with Bristol Pound).

References

  1. Lietaer, B.A., G. Hallsmith, (2006) Community Currency Guide, Global Community Initiatives, accessed on 9 September 2013 at <https://www.community-exchange.org/docs/Community_Currency_Guide.pdf>
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