Legal Definition of Moneys

It must also be said that monetary sovereignty is one of the attributes of a modern state in international law.41 The right to regulate the monetary system belongs to the state; and the obligation of other States to recognize that the monetary system can be applied only if the currency in question was created under the legal authority of the first State. However, the concept of state sovereignty implies the right to legislate in certain areas that fall within the established scope of that sovereignty.42 Such considerations suggest that while a legal definition of money must necessarily include or reflect at least some elements of the functional approach (and thus the realities of commercial and economic life), it must also contain an element that reflects the requirement of international law just mentioned, namely that « money » must exist within some legal framework because it reflects the exercise of sovereignty by the State concerned. The legal tender of the United States or a foreign country or a counterfeit thereof. 18 USC Although not intended to be the main starting point for this book,94 reference must be made to the « social theory of money, » which asserts that it is the use of commercial life or people`s trust that has the power to create or recognize « money. » In other words, it is the attitude of society – not the state itself – that is relevant to the identification of money. For the economist, there is no doubt that public acceptance and confidence are important criteria in the definition of money; People will enter into contracts in the form of money and accept payments because they believe that other members of the same society will behave in the same way.95 This, in turn, leads to the idea that all money is money if it works as such; But in itself, this definition is not satisfactory when it comes to defining the properties of money from a legal point of view. As we have already explained in this chapter, a purely functional approach to money alone cannot constitute a sufficient basis for a legal definition; Social theory cannot be reconciled with the undeniable monopoly of modern states over their currencies96 and the effective recognition of this monopoly by international law. Whether in crisis situations or otherwise, money cannot be created – or lose its character – by the will of the community alone;97 a legal sanction is required for this. The U.S. Supreme Court`s recognition of Confederate banknotes as « money » does not support social theory; on the contrary, the Court recognized that the actions of the insurgent government could not be questioned on its territory, since it constituted the de facto supreme authority at that time.98 The second consequence of the theory of the state is that money in law can only lose its character because of formal demonetization – that is, the introduction of a subsequent law. which deprives the old currency of its character as such.85 The statement just made implies that money cannot lose its character by habit or otherwise. Legally, it is suggested that this thesis remains true, although history provides many examples of the application of Gresham`s Law, in which bad money removed good money from circulation.86 Gresham`s Law was generally applied to coins whose face value was less than the intrinsic value of their metal content (gold or silver). It is inevitable that holders of undervalued coins will tend to retain them. But they retained their status as « money, » for they were always legal tender for the number of units of account to which they referred; And coins don`t lose their legal tender simply because some holders choose to save rather than spend.

If a coin – such as a gold sovereign87 – can be sold at a price higher than its face value, then it is sold as a commodity and not as money.88 However, apart from these cases of « goods », the courts will apply their national laws on legal tender and ignore any premium that the market randomly charges on certain coins.89 Similarly, Courts will generally ignore that a long-term monetary obligation may lose its effective value over time. Thus, the annual rent of three shillings per annum, payable under a 1,000-year lease of 1607, has very little value today, but remains a monetary obligation that can be fulfilled at face value.90 These rules derive in part from the principle of nominalism, which will be discussed later.91 It may be added that states have sometimes minted gold coins. without giving them a certain value in terms of the local currency unit – the South African Krugerrand – is a typical example. Although it has been (indirectly) designated as legal tender, no specific monetary value has been attributed to it.92 It follows that these coins are not « money » and must be considered as commodities. This aspect of the definition may be important and will be discussed later.93 It must be recognized that the law of banknotes or paper money has evolved somewhat differently, since their history is linked to that of bills of exchange and banking transactions.57 Notes in the modern sense have not always been distinguishable from other negotiable instruments. Although it was decided in an early case that banknotes would generally be regarded as « money » in a legal context.58 When the Bank of England was founded in 1694,59 it was not a central bank of issue in the modern sense of the term. The law did not even include the question of whether the bank should issue banknotes, let alone seek to give it an exclusive monopoly on banknotes that would have been compatible with the state theory of money.60 Nevertheless, immediately after its establishment, the bank began to function as an issuing and circulating bank. In addition, many regional banks continued to issue banknotes without state control.

According to this definition, money is what the law calls money. So all the government says is money. This is the money for which there is no limit to the amount of money offered in one payment at a time. For example, paper notes are unlimited legal tender in India, as all banknotes can be used to settle payments of unlimited value. On the basis of legal recognition, there are two types of funds: w) money transfer. Series of transactions, starting with the payment order of the originator, carried out for the purpose of payment to the beneficiary of the order. The term includes any payment order issued by the payer`s bank or an intermediary bank to execute the payer`s payment order. A transfer of funds is concluded when the beneficiary`s bank accepts a payment order in favour of the beneficiary of the payer`s payment order.

Electronic money transfers within the meaning of Section 903(7) of the Electronic Fund Transfer Act (15 U.S.C. 1693a(7)) and any other transfer of funds through an automated clearing house, ATM or point-of-sale system are excluded from this definition.

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