The smallest possible money unit When money crashes into the laws of physics
sciencedirect.com
sciencedirect.com
> For example, if the smallest coin unit is one cent, then one cannot use a money unit below one cent. This can be enforced by law because only legal tender can be used.
I think the author misunderstood what "legal tender" means. All it means is this: when there is a conflict about a debt and two parties end up using the legal system to resolve it, then the creditor must accept settlement in legal tender.
For example, if I sue you because we had an agreement for you to deliver some gold to me and you failed to deliver, then I may have to accept settlement in euro or dollar or whatever is recognized as legal tender by the court.
In many jurisdictions, people are generally free to use different means of payments or even refuse legal tender when no debt had been established yet. The concept only comes into play in court.
31 U.S.C. 5103 https://www.law.cornell.edu/uscode/text/31/5103) says “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.”
It’s not legal tender for just court judgments, but all debts, public charges, taxes, and dues.
Many countries have laws specifying that certain denominations are legal tender only up to a certain total amount. The US does not, but you can run into other legal trouble. Consider the contractual obligation of good faith, for example. You might potentially be liable for the additional expense incurred in accepting a truckload of pennies.
" A payment of coins is a legal tender throughout Australia if it is made in Australian coins, but this is subject to some restrictions about how much can be paid in coin. According to the Currency Act 1965 (section 16) coins are legal tender for payment of amounts which are limited as follows:
* not exceeding 20c if 1c and/or 2c coins are offered (these coins have been withdrawn from circulation, but are still legal tender);
* not exceeding $5 if any combination of 5c, 10c, 20c and 50c coins are offered; and
* not exceeding 10 times the face value of the coin if $1 or $2 coins are offered. "
Reference for the definition of legal tender by the UK royal mint:
https://www.royalmint.com/aboutus/policies-and-guidelines/le...?
“This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor.”
Anyway, that treasury.gov link is actually a good reference for the original point I was trying to make about the introduction section of the paper: it explains that companies are not obliged to accept legal tender for normal payments.
But if you bought that same tv on an installment plan, they would have to accept payments in cash.
The first one does not involve debt, the second does. That’s the difference.
If we start being this technical, you could set up a box with two sides with a gold atom in superposition. The chance of finding the gold atom on either side is 50%. Suppose the contents of both sides are owned by different people.
Now it's possible to own (in expectation) 50% of the minimum money unit.