What is Legal Tender?
Every once in a while I come across a situation where I see someone convinced that their form of payment has to be accepted because it is “legal tender”. Usually it is someone insisting a store has to take their cash or a long-winded essay about Bitcoin’s status as legal tender.
Legal tender means that you can legally pay your debt with it. That’s it. Here it is from the largest money printing machine in the world:
Is it legal for a business in the United States to refuse cash as a form of payment?
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.
The main backing of a fiat currency system is the might of the government behind it, and legal tender means any government-mandated debt can be legally repaid with it, including your taxes.
Merchants have every incentive to maximize their sales, which is why they try to accept a variety of payment forms. This has nothing to do with their legal obligation to accept any particular method of payment, however. They can refuse all cash, only accept cash, or straight up go for a good old-fashioned barter system.
First published at: https://kaveh.page/blog/legal-tender
