Legal tender is a medium of payment that is recognized by a legal system as valid for meeting a financial obligation or settling a debt. In other words, it is the form of money that courts of law are required to recognize as satisfactory payment for any debts. Legal tender can come in various forms, such as coins, banknotes, or even digital currency, depending on the laws of the jurisdiction. The concept helps facilitate commerce as it provides a universally accepted medium of exchange within a country or jurisdiction.
The determination of what constitutes legal tender is primarily the responsibility of a country’s government or central monetary authority. Businesses themselves can also determine what they accept as legal tender. For example, some businesses may refuse to accept cash despite its national status as legal tender.
