31 U.S. Code § 5103 - Legal tender (2024)

FAQs

31 U.S. Code § 5103 - Legal tender? ›

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Legal Tender refers to all U.S. coins and currency that issued by the government. U.S. Cash dollars are also a valid form of legal tender. Nonetheless, federal statutes do not require a seller to accept cash as a form of legal tender for payment of goods or services that were rendered.

Many common and safe payment methods such as cheques, debit cards and contactless aren't legal tender. But again, it makes no difference in everyday life.

The shift is rooted in Article 1, Section 10 of the U.S Constitution, stating that "No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts."

What Is Lawful Money? Lawful money is any form of currency issued by the United States Treasury and not the Federal Reserve System. It includes gold and silver coins, Treasury notes, and Treasury bonds.

Under regulations issued by the Department of the Treasury, mutilated United States currency may be exchanged at face value if: More than 50% of a note identifiable as United States currency is present.

Key Takeaways

Fiat money has no intrinsic value, while legal tender is any currency declared legal by a government. Governments can issue fiat currency and make it legal tender by setting it as the standard for debt repayment.

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Coins and banknotes are usually defined as legal tender in many countries, but personal cheques, credit cards, and similar non-cash methods of payment are usually not.

Legal tender is money, but not all money is legal tender. For example, a creditor must accept five $20 bills to pay a $100 debt, but the creditor could refuse to accept a $100 check. The bills are legal tender and must be accepted by the government or creditor.

Does the government know if you buy gold or silver? ›

Do I have to report my gold coin purchases to the Government ? No, there is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S.

Except during times of active persecution, there is no historical precedence of gold jewelry being confiscated. If a nation operated under the rule of law, seizing jewelry wasn't part of the government's strategy.

Under current federal law, gold bullion can be confiscated by the federal government in times of national crisis. As collectibles, rare coins do not fall within the provisions permitting confiscation. No federal law or Treasury department regulation supports these contentions.

All U.S. currency remains legal tender, regardless of when it was issued.

Can individuals use such accounts to pay bills and get money? No. The Federal Reserve Banks provide financial services to banks and governmental entities only. Individuals cannot, by law, have accounts at the Federal Reserve.

Whilst the £20 has been deemed legal tender it has not yet been designed to be a circulating coin. That means you can still use it to settle a debt in court, but you will probably find that your corner shop or your bank will not accept a £20 coin in exchange for goods or services.

Tender is to unconditionally offer money or performance to meet an obligation. The term most commonly arises in the context of the contractual sale of goods.

It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.

Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues."