Legal tender

Legal tender simply refers to money that is recognised as official by the government of the country, and therefore can be used to perform transactions.

For instance the paper currency of each country like the dollar bill and so is legal tender; obscure or old coins or foreign coins won't be legal tender in other countries.

Related Articles

Lien
Clearing House
Illiquid
Long Coupon
Gold standard

More Financial Words and Vocabulary Explained