Legal Tender Research Articles

Socio economic impact and analytics of cashless economy

A cashless society does not use banknotes or coins for financial transactions, but rather digitalinformation (usually anelectronic representation of money). As early as the beginnings ofhuman civilisation there have been cashless societies based on barter and other ways of trade, and current cashless transactions are also conceivable utilising digital currencies such asbitcoins (as well as credit cards, debit cards, and mobile payments). As a result, the phrase"cashless society" is used in this article to refer to a society in which cash is replaced by itsdigital counterpart, which means that legal tender (money) is onlyavailable in electronic digitalform and may only be traded electronically.While this idea has been addressed extensively dueto a rapid and expanding usage of digital ways of recording, managing and trading money inmany areas of the globe, transactionsthat would previously have been done with cash are nowcommonly done electronically in many parts of the world.

Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador

Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador

A Review of Central Bank Digital Currencies

This is a review paper on the exploratory research done by various central banks and international organisations on CBDCs and the framework to be followed for implementing these CBDCs so that the monetary system of a specific country remains unaffected. CBDCs and cryptocurrency in general as we know have become quite popular and are the talking point for many research scholars, economists and investment analysts. While many believe cryptocurrencies to have no intrinsic value, the value of the underlying technology i.e blockchain is something that can be argued upon. CBDCs remove the major cons of cryptocurrency by providing stability to the volatile cryptocurrency market and by acting as a legal tender thereby gaining the trust of retail public. Many governments believe that the introduction of CBDCs into the economy could simplify the payment’s structure thereby increasing the velocity of money leading to higher GDP growth. But one possibility that shatters this glass of optimistic views is the possibility of disintermediation of banks which could adversely affect the credit creation capacity of the country and disintegrate the entire monetary policy formation mechanism. Therefore, though the concept of digital currencies may excite many people, its adoption in an economy should be considered only after thorough research and pilot programs conducted by the central banks.

Post demonetization impact on economy of India

Demonetization in India will be five years old on November 8, 2021. It was on this day in 2016, at 8 p.m., when Prime Minister Narendra Modi announced that the 500- and 1000-rupee notes - which together constituted 86% of the money in circulation - would no longer be considered legal tender in India. According to its initial stated goals, the policy of demonetization was meant to encourage the use of digital payments. A major promise of demonetisation was that hoarders of cash would be obliged to deposit it in the banks as a result of the currency being demonetized According to the Prime Minister's announcement of the policy, “Which honest person would not be saddened by news of crores of currency notes secreted beneath the mattresses of government officers? Or by stories of money recovered in “gunny sacks””. People who possessed unexplained cash were expected to either disclose it to the tax authorities or get rid of it. Demonstration has been regarded as a “surgical blow” against corruption by many.

IPCRF: An End-to-End Indian Paper Currency Recognition Framework for Blind and Visually Impaired People

Currency recognition has always been a troublesome task for blind and visually impaired people (BVIP). The problem is more severe in developing countries such as India, where there is still a lack of robust currency recognition systems. BVIP primarily relies on size variations and patterns such as intaglio printings for recognizing the underlying currency denominations. Most of the current Indian legal tenders resemble in size, thus making the identification process more strenuous. Also, the engraved patterns are not as distinctive as BVIP standards, and they fade over time. For an automated paper currency recognition system, issues such as folded or partial views, uneven illumination, and background clutter make it non-trivial and challenging. This paper ventures to present an end-to-end and robust framework for assisting BVIP in recognizing the Indian paper currency denomination. This paper presents a lightweight network, IPCRNet, useful in a resource-constrained environment such as low/medium level smartphones. The proposed network is based on Dense connection, Multi-Dilation, and Depth-wise separable convolution layers. Additionally, we congregated one of the most diversified Indian paper currency image dataset with more than 50,000 images belonging to almost all denominations in circulation. A customized and publically available android application, “Roshni-Currency recognizer”, has also been introduced. The experimental results on multiple datasets demonstrate the superiority of the proposed model. IPCRNet improves the classification accuracy by more than 2% on the proposed dataset compared to the state-of-the-art networks.

Issues of integrating central bank digital currency into the fiat money system

Since 2020, a digital equivalent of legal tender became one of the most discussed topics among the international community of central banks. Moreover, the Bahamas’ “Sand Dollar” – the world's first actually operating platform has been launched. With the onset of the pandemic, the acceleration of events is influenced by a non-economic factor – the demand for all methods of remote socio-economic interaction. In 2021, based on previous public consultations, the Bank of Russia published the Digital Ruble Concept. The article discusses the background, goals and side effects of creating central bank digital money. The idea of digital transformation of banknotes meets the public demand for a payment instrument that is practical in modern realities, but its implementation is associated with uncertain consequences for the banking sector and the future development of technologies and security standards for settlements using digital solutions. In this context, the rationale for placing on a reimbursable basis the services of private financial agents on the digital money platform is given.

Conception of Money in Islamic Economic Dimension

Money is seen not only as a legal tender (legal tender) but also seen as a commodity, money has two possibilities, namely the possibility leads to the good thing and the possibility leads to the bad thing. Both depend on the person using it. Money continues to innovate and evolve from cash to non-cash or electronic money. The emergence of crypto currencies raises pros and cons in various circles. This study aims to explain the concept of money from an Islamic perspective by analyzing crypto currencies as virtual currency. The writing method used is qualitative research using a literature review. The data taken are secondary data and data collection techniques using documentation and library studies. The results of this study explain that in Islamic economics currency must have underlying assets recognized by the government to avoid "money to money" transactions, while crypto currencies do not have underlying assets and no one is responsible.

Ewolucja środków płatności (zapłaty): od pieniądza gotówkowego do pieniądza elektronicznego

Money has existed in civilization for thousands years. The development of money has passed through various stages in accordance with time, place and circumstances. Primitive money took many forms, from cowrie shells to cattle and later transformed into metallic money (like gold, silver, copper, bronze, etc.) The continued development of money was very much linked to the growth in world trade and commerce. Next to cash came up non-cash payment transactions, mainly with credit or debit card. Money serves three purposes. First, it serves as a medium of exchange. Second, as a standard of value, it serves as a measure for the value of a good or service and thus provides a standard for making comparisons between different goods and services. Third, it must be widely accepted. The larger the community of users who trust and accept money, the more that its value as a medium of exchange is increased. Finally, when it is exchanged, there is anonymity. Rapid advances in technology, including Internet have made a lot of changes in payment methods. Technological innovations convert money into something more virtual than physical. Electronic money (e-money) is the digital equivalent of cash. It can be used for making payments without involving bank accounts in the transactions and always acts as a prepaid bearer instrument. E-money can be software or hardware based. One common type of hardware-based e-money is the ‘electronic purse’, where users store relatively small amounts of money on the chip or magnetic stripe of their payment card, other smart card or on mobile phones, to make small payments. Another option is to store e-money in a payment account on the Internet (software based). In general, e-money should be characterized as a substitute for currency (cash) The development of innovative e-money raises numerous legal and regulatory issues that must be addressed. These include finding acceptable methods for authentication and protection of information, accommodating the special needs of law enforcement, and creating the requisite means of settling disputes. The progressive development of technology and communication, harmonization of currency systems and becoming more common use of electronic instruments may create the uniform (European) system of electronic money. That would made e-money the legal tender with the force of redemption obligations.

The Impact of Cryptocurrency Adoption as a Legal Tender in El Salvador

Cryptocurrency is taking the world by storm. It is certainly not a new technology anymore to the world. Countries all over the world are deciding on how they should treat the cryptocurrency as it directly impacts their existing ecosystem of fiat currency and how people use it. Different countries have adopted different approaches like considering it as a financial assets, securities, outright illegal or even legal tender in some countries. There are still a good number of countries which are yet to declare whether trading, using or mining it is legal or illegal. In such chaos, El Salvador is one such country which has adopted Bitcoin as a legal tender in 2021. It has been found that bitcoin adoption is expected to help their economy as GDP will probably increase after large scale adoption of Bitcoin. The electricity consumption for bitcoin mining has reached an all-time high. The environmental concerns are rising. However, El Salvador is keen on using 100% clean energy sources. El Salvador has been producing the largest amount of geothermal energy in all of Central America.

The Impact of Crypto-Asset Utilization as Payment Instrument toward Rupiah as Legal Tender in Indonesia

The utilization of Cryptocurrency increased across the globe. This phenomenon has led to varied responses from countries concerning whether this new phenomenon will affect the national monetary policy. As one of the countries where Cryptocurrency usage has flourished, Indonesia has reacted to its utilization. To this day, Indonesia has clearly stated that CryptoAsset (referring to Cryptocurrency) is considered as a tradable commodity, but not as a payment instrument. However, this policy does have not decreased the utilization of Cryptocurrency in Indonesia, proven by its market capitalization which has kept increasing over the years.This article thoroughly discusses Cryptocurrency utilization as a payment instrument, and how it will affect the legal tender (The Rupiah) in Indonesia. This article also analyzes the extent to which Cryptocurrency will affect the payment systems in Indonesia and how Bank of Indonesia will counter the Cryptocurrency’s utilization as a payment instrument within Indonesia’s jurisdiction.

Determining Forms of Expressions of Food Violence in Venezuela

In the present investigation, the existence of various forms of expression of food violence in Venezuela was determined, through the measurement of contextualized variables within the established classification. The existence and aggravation of forms of economic expression of food violence were determined, with a relative improvement in food availability but an increase in the difficulty of access: the basic food basket was located in December 2020 at $180.16, and the minimum wage at $6.35, which covers only 3.5% of the basic food basket. Additionally, a substantial increase in the use of the US dollar was determined, in parallel to the Venezuelan legal tender (Bolívar) as well as the introduction of the electronic currency “Petro”, which distorts the food access market and hinders the accessibility. Likewise, the effectiveness index for the delivery of food subsidies and the ability to satisfy the basic food basket through the food programs was determined. The existence of forms of moral expression of food violence was determined by observing in the respondents, high levels of dissatisfaction in the delivery criteria both in a general and community way and high levels of inappropriate perception of the use of propaganda or political advertising in the delivery of help with the no consulted use of the image of the beneficiaries. Forms of emotional expression of food violence were evidenced, showing high levels of dissatisfaction and uncertainty in the ability to purchase food, as well as high levels of anguish. Forms of cultural expression of food violence were determined, by determining changes in the ancestral and traditional eating pattern of the Venezuelan, as well as high measurements of dissatisfaction in the forced change in said pattern, as well as in the alteration of tastes and preferences expressed by the respondents have experienced. Sanitary forms of expression of food violence were evidenced, by determining considerable percentages in the consumption of basic products such as flour and sugar in bulk with ignorance of the brand and origin of the food and high levels of dissatisfaction with the realization of this type of consumption. No physical forms of expression of Food Violence were evidenced when the queues for food access were apparently stopped, and the use of body markings.

Pushing the Boundaries: A Tentative Taxonomy of Money in New Zealand Private Law

This article seeks to define the boundaries of money in the context of proprietary taxonomy in New Zealand. It suggests that the traditional legal concept of money exclusively based on state issued (fiat) currency is dated, as does not accommodate the near-universal use of bank money in commercial transactions, nor the recent technological changes introduced by virtual currencies. As long as something functions as a means of payment and the holder has the right to exchange it for legal tender, the divide between mutually agreed payment obligations into those made on the base of fiat currencies and those not, becomes artificial. In providing responses to similar commercial arrangements and parties' legitimate expectations, not only coins and banknotes, but also balances held by customers in banking institutions, foreign money, and digital currencies, should qualify as money for private law purposes.

Examination of the Tax Treatment of Cryptocurrency Transactions in Nigeria

Tax is assessed and paid in the legal tender in which the transaction was conducted. A legal tender is a fiat currency centrally issued by the government through its Central Bank and is legally declared and designated as money to meet all kinds financial obligations including payment of taxes and debts within the boundary of a particular country. However, advancements in technology led to the emergence of virtual medium of payment such as ‘cryptocurrency’ which do not enjoy legal tender status like fiat currency. Over the past decade, there has been an increased number of transactions in Nigeria where cryptocurrency was the means of payment. This raises the question as to how such transactions will be assessed to tax bearing in mind that tax can only be assessed and paid in the currency in which the transaction was conducted. In addition, the virtual nature of cryptocurrency creates opportunities for tax avoidance thereby constituting a serious tax challenge for a developing country such as Nigeria. It therefore becomes necessary to address the taxation of cryptocurrency transactions to prevent tax avoidance that can arise therefrom. This objective of this article is toexamine the nature and the legal status of cryptocurrency. The article will also examine the tax treatment of cryptocurrency in some selected tax jurisdictions as well as the tax challenges posed by cryptocurrency transactions.

Central bank digital currency, loan supply, and bank failure risk: a microeconomic approach

Central bank digital currencies (CBDCs), which are legal tenders in digital form, are expected to reduce currency issuance and circulation costs and broaden the scope of monetary policy. In addition, these currencies may also reduce consumers’ need for conventional demand deposits, which, in turn, increases banks’ loan provision costs because deposits require higher rates of return. We use a microeconomic banking model to investigate the effects of introducing an economy-wide, account-type CBDC on a bank’s loan supply and its failure risk. Given that a CBDC is expected to lower the cost of liquidity circulation and become a strong substitute for demand deposits, both the loan supply and the bank failure risk increase. These increases are countered by subsequent increases in the rates of return on term deposits and loans, which, in turn, reduce the loan supply and thus bank failure risk. These offsetting forces lead to no significant change in banking, as long as the rate of return on loans is below a certain threshold. However, once the rate is above the threshold, bank failure risk increases, thereby undermining banking stability. The problem is more pronounced when the degree of pass-through of funding costs to the loan rate is high and the profitability of a successful project is low. Our results imply that central banks wishing to introduce an economy-wide, account-type CBDC should first monitor yields on bank loans and consider policy measures that induce banks to maintain adequate liquidity reserve levels.

Lawful Sequence of Events and Cryptocurrency Anomalies: An Empirical Investigation

The structural variations related to legal tender of cryptocurrencies operating across the world markets has been instable since their inception. There have been many changes incorporated for their status to be recognized as a legal financial instrument for investment purposes over the virtual financial markets. The concept of anomalies associated with the popular efficient market hypotheses given by Eugene Fama existed for Bitcoin and few other cryptocurrencies over a period of time. The present work attempts to contribute to the existing literature on cryptocurrency studies. A focused investigation has been carried for cryptocurrencies to find different behaviour of returns on these currencies over a varied response from various countries with respect to their permissible manoeuvres. The study has used independent sample t-test, one-way ANOVA and dummy regression analysis to examine the day of the week effect for a time period between 2014–2020 split into multiple sub-periods. Anomalies have been found for cryptocurrencies across multiple sub-periods with varied magnitude.

S2149 Nontender Legal Tender: Domestic Coins as Foreign Bodies

S2149 Nontender Legal Tender: Domestic Coins as Foreign Bodies

Crisis Mitigation through Cash Assistance to Increase Local Consumption Levels—A Case Study of a Bimonetary System in Barcelona, Spain

Subsidies in the form of direct transfers from the government to citizens constitute a powerful mechanism for crisis mitigation and for the alleviation of economic inequalities. However, the connection between direct transfers of cash assistance to selected individual beneficiaries and the prosperity of their immediate surrounding local economy has not been sufficiently explored. This paper presents a case study which analyzes the effects of allocating cash assistance in the form of a local currency. It shows that, under certain conditions, such a transfer not only provides the beneficiaries with additional purchasing power to satisfy their needs but also that the monetary injection benefits local SMEs by generating additional turnover. Using transactional data from the system, some indicators are proposed to analyze the properties of the system, namely, user satisfaction, total and average income generated by local businesses, the local multiplier, the recirculation of the local currency, and the velocity of its circulation. Our findings indicate that cash assistance provided in the REC local currency could contribute to local economic development and financial stability by sustaining local commerce, while preserving most of the original positive effects of cash assistance in a legal tender.

Technological and socio- institutional dimensions of cryptocurrencies. An incremental or disruptive innovation?

ABSTRACT Despite the increase in literature on financial innovation as a force of change in the financial system, most contributions fail to analyze the relationship between the socio-institutional and technological design of cryptocurrencies. This paper aims to fill this gap by providing a case study of Bitcoin, the most representative of the virtual and cryptocurrencies. We begin by addressing the concept of financial innovation as a social phenomenon embedded in networks of users, technologists, regulations, institutions, culture and history. Secondly, we examine the disruptive and evolutionary nature of the Bitcoin, comparing it with the characteristics of legal tender money. The main conclusions indicate that although Bitcoin represents a disruptive technology in the process of monetary creation through a peer-to-peer network, it is not a new conception of money in its institutional dimension.

Cryptocurrency: Towards Regulating the Unruly Enigma of Fintech in Nigeria and South Africa

One of the most modern inventions of financial technology (FinTech) since after the global financial crisis of 2008 is the crypto or virtual currency/asset. Since the creation of the first cryptocurrency, the Bitcoin, in 2009, it is estimated that over five thousand variants of the Bitcoin and other cryptocurrencies have emerged. Virtual currencies have become widespread across the globe but their legal status and uses in various countries have remained uncertain. They have been variously classified as currencies, securities, properties, assets, commodities and tokens, and used as means of exchange but are not legally recognised as legal tender. In many jurisdictions their emergence was greeted with scepticism and express or tacit rejection by financial and securities markets regulators, but over time, owing to their increasing popularity, characteristics, positive and negative potentials, there has been a gradual shift towards their formal recognition and regulation. Regulatory authorities in many countries are now grappling with designing appropriate policy and regulatory framework for the crypto phenomenon. This paper interrogates the current legal status and efforts to regulate cryptocurrencies in two leading African nations, Nigeria and South Africa, and highlights the challenges of designing an appropriate regulatory framework for this enigmatic technology. The paper adopts the doctrinal legal research methodology, employing the descriptive, analytical, and comparative approaches. It follows a structured review and analysis of relevant extant legislation on currencies and securities in the countries to ascertain whether they cover cryptocurrencies. It then compares the current position of the law on the subject in the two countries. Bearing in mind that it may not be possible to totally ban dealing in cryptocurrencies, the paper concludes that regulation has become imperative. Drawing from the position on the subject in more developed nations, the United States of America (US) and the European Union (EU), this paper proposes a model of regulation of virtual currency not only for Nigeria and South Africa but also for other African countries.

Impact of 2016th-year Demonetization on Banks in India

Demonetization is a monetary step in which a particular series of banknotes render invalid either by the government or by issuing authority of the nation to eliminate the undeclared income. It is a process in which certain units of currency notes will not be remains as legal tender. On November 8, 2016, government demonetize old ? 500 and ?1000 banknotes which were 86% (15.41) trillion in total circulation to curb the black money, wipe off the fake currency, and make a halt in corruption. This move shook all the corners of the economy in which the banking sector was significantly affected. It gave a positive impact on the financial statements of banks, as the deposits were increased, the net earnings of the bank were also increase. Therefore, the study has been conducted to throw the light on the impact of demonetization on banks, primary data have been collected for the of Pre and Post demonetization period.