The $1, $2, $25, $500 and $1,000 notes retain their face value, even if they are no longer legal tender. You can take them to your financial institution or send them to the Bank of Canada to redeem them. Sometimes monetary issues such as commemorative coins or transfer slips may be issued that are not intended for public circulation, but are still legal tender. An example of such a currency is the Maundy currency. Some currency issuers, notably Scottish banks, issue special commemorative notes for normal circulation (although no Scottish or Northern Irish notes are legal tender in the United Kingdom). In addition, some standard coins are minted on higher-value dies as “non-circulating” versions of the coin, which collectors can purchase for an additional fee. These documents are nevertheless legal tender. Some countries issue precious metal coins on which a monetary value is indicated well below the value of the metal containing the coin: these coins are called “non-circulating legal tender” or “NCLT”. The 1¢ and 2¢ coins were withdrawn from circulation in February 1992, but are still legal tender.  The purpose and function of legal tender is for the courts to determine whether it is a satisfactory payment for monetary debts. Each jurisdiction can set its specific limits on what legal tender is, but generally that`s all when it`s offered and accepted to pay down debt. Although the original creditor to whom the money is owed is not necessarily obliged to accept the payment offered, the specific act of offering payment discharges the debt. Amendments to the Bank of Canada Act and the Currency Act, passed by Parliament in 2018, gave the Canadian government the power to revoke the legal tender status of bank notes, something it could not do before.
On the other hand, gold or silver coins do not necessarily have to be legal tender if they are not fiat money in the jurisdiction where they are offered as a means of payment. The Currency Act of 1965 states (in part): Legal tender also enables monetary policy. From the issuer`s perspective, legal tender allows the issuer to manipulate, devalue and devalue the currency to obtain seigniorage and facilitates the issuance of escrow media by the banking system to meet trading needs. In the absence of legal tender laws, Gresham`s law would make monetary policy, seigniorage, currency manipulation, and fiat media spending much more difficult, as good money in this case tends to drive out bad money. The popularity of cross-border and online shopping is increasing the demand for more forms of money, such as popular cryptocurrency alternatives such as Bitcoin, which are recognized as legal tender. However, given the official objections to such alternatives, except in a few minor cases, they may still be a few years away and are not legal tender in the United States or most other countries. There are many online services that accept cryptocurrencies, and this practice is completely legal. Due to their status as unofficial competitors with legal tender, cryptocurrencies are mainly limited to use in gray and black market activities or as speculative investments. The main purpose of this law is to ensure national acceptance of the U.S. currency in accordance with constitutional language, which reserves to Congress the power to create a single currency of equal value to all the United States. Although the law provides that U.S.
currency is legal tender and can be accepted for the payment of debts, it does not require the acceptance of cash payments, nor that the acceptance of cash cannot be restricted.  Notes and coins may be withdrawn from circulation, but are legal tender. U.S. bank notes 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 withdrawn from circulation in a bank. However, banknotes withdrawn from circulation are usually no longer legal tender, but can be exchanged for common currency at the Bank of England itself or by post. All issues of New Zealand paper and polymer banknotes issued from 1967 onwards (and $1 and $2 notes until 1993) remain legal tender; However, the 1, 2 and 5 cent coins are no longer used in New Zealand. The Australian dollar, consisting of banknotes and coins, is legal tender in Australia. Australian banknotes are legal tender under the Reserve Bank Act 1959, p.36(1), with no limit on the amount. The Currency Act 1965 also provides that Australian coins intended for general circulation are also legal tender, but only for the following amounts: Some central banks demonetize banknotes after legal tender has been removed, meaning they no longer redeem their face value. In other words, demonetized banknotes lose their value. The sixth series of Swiss banknotes from 1976, recalled by the SNB in 2000, is no longer legal tender, but can be exchanged for regular banknotes until April 2020.
In 1914, the Banking Amendment Act gave legal tender status to the banknotes of any issuer and removed the requirement that banks authorized to issue banknotes must exchange them for gold on demand (the gold standard). Many other countries are officially removing old banknotes from circulation. More than 20 central banks around the world have the power to withdraw legal tender status from their notes. These include: Fiat money is not backed by physical commodities such as gold. Instead, it is supported by the government. Most fiat currencies today are fiat currencies. Fiduciary monetary value is based on the relationship between supply and demand. Fiat has value because of people`s confidence in this nation`s currency. Demonetization is the act of stripping a monetary unit of its legal tender. It occurs whenever the national currency changes: the current form(s) of currency are withdrawn from circulation and withdrawn, often to be replaced by new notes or coins. Sometimes a country completely replaces the old currency with a new currency.
Currently, there is no plan or legal means to demonetize bank notes in Canada. On June 6, 1966, India devalued the rupee. To avoid this devaluation, several of the states that used the rupee introduced their own currencies. Qatar and most of the Truce states have adopted the riyals of Qatar and Dubai, while Abu Dhabi has adopted the Bahraini dinar.