[rt]

Hi,
Ron Paul advocates the abolition of legal tender laws to allow competing currencies. But what exactly are legal tender laws?
According to Wikipedia:
“Some jurisdictions may forbid or restrict payment made other than by legal tender. For example, such a law might outlaw the use of foreign coins and bank notes or require a license to perform financial transactions in a foreign currency.”

But tit also says that payments can be made in other currencies when this is specified in the contract. So which is true for the US and/or the EU? What would be different without the legal tender laws?

[jmherbener]

The government has legal privileges for some monies and legal disabilities for others. Legal tender laws are one type legal privilege. Here is a statement by the Treasury on legal tender:

http://www.treasury.gov/resource-center/faqs/currency/pages/legal-tender.aspx

On the legal disability side, U.S. courts will not enforce gold contracts:

http://www.treasurydirect.gov/instit/statreg/fraud/fraud_adams.txt

Without such legal support, fiat money would not be chosen by people over commodity money.

[Author]

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