Legal tender also allows monetary policy. From the issuer`s point of view, legal tender allows the manipulation, devaluation and devaluation of the currency by the issuer to obtain seigniorage and facilitates the issuance of fiduciary media by the banking system to meet the needs of trading. In the absence of legal tender laws, Gresham`s Law would make monetary policy, seigniorage, currency manipulation, and issuing fiat media much more difficult, as good money in this case tends to drive out bad money. Banknotes and coins may be withdrawn from circulation, but remain legal tender. U.S. banknotes issued at any given time are legal tender even after they have been withdrawn from circulation. Canadian $1 and $2 notes are legal tender even if they have been withdrawn and replaced by coins, but Canadian $1,000 notes are legal tender even if they are withdrawn from circulation when they arrive at a bank. However, Bank of England banknotes that are withdrawn from circulation are generally not legal tender, but remain redeemable for current currency at the Bank of England itself or by post. All paper and polymer issues of New Zealand banknotes issued from 1967 onwards (and $1 and $2 notes until 1993) are still legal tender; However, the 1, 2 and 5 cent coins are no longer used in New Zealand. The small Republic of the Marshall Islands (RMI) has also announced that it will introduce a new cryptocurrency, sovereign, as legal tender. The sovereign will be tied to an existing and decentralized peer-to-peer cryptocurrency market. Currently, the U.S. dollar acts as legal tender and currency in the RMI and will continue to do so alongside the new legal tender when the government begins issuing states.

The first time that gold and silver coins were introduced as legal tender in the French Penal Code of 1807 (art. 475, 11 °). In 1870, legal tender status was extended to all bank notes of the Bank of France. Anyone who rejects such coins because of their total value would be prosecuted (French the art of the Criminal Code. R. 642-3). Gold and silver coins are not legal tender in the United States, but some states have lobbied for this to change. Precious metals can be exchanged for legal tender in some pawnshops and other places, but are not legal tender in themselves.

Cryptocurrency is becoming increasingly popular and many require that certain types, such as Bitcoin, be considered legal tender. Some countries are even taking steps to convert their national currency into cryptocurrency, such as Venezuela`s Petro. The Decimal Currency Act 1970 regulated legal tender before the introduction of the euro and laid down provisions similar to those of UK law (all inherited from the old UK law), namely: coins with a volume of more than 10 pence became legal tender for a payment not exceeding £10, coins with a volume not exceeding £10 became legal tender for a payment not exceeding £5, and bronze coins were legal tender for payment of up to 20 pence. The new Taiwanese dollar issued by the Central Bank of the Republic of China (Taiwan) is legal tender for all payments in the territory of the Republic of China, Taiwan. [33] However, since 2007,[34] candidates who become officials in elections in the Republic of China are no longer allowed to pay a deposit in the form of documents. [35] Note that the U.S. dollar is the only legal tender in the country. Outside of the United States, currencies and various cryptocurrencies are sometimes accepted, but business owners should convert these currencies into dollars to pay taxes and transfer the proceeds of a sale to a bank account. Sometimes countries accept the legal tender of another country if they are near the border or have close business relationships.

Shops and restaurants near the U.S.-Canada border accept both U.S. and Canadian dollars to make it easier for tourists. Some countries around the world actually took the U.S. dollar as legal tender rather than currency because they found the dollar to be more stable in value. This practice is called dollarization or currency substitution. In the 19th century, gold coins were legal tender for any amount, but silver coins were not legal tender for sums greater than 2 pounds or bronze for sums greater than 1 shilling.