The problem began as people were using coins that were meant as a commemorative and collectible issue for commerce. Since they were minted with permission of BSP and have a denomination, they are recognized as legal tender coins.
Sometime in the future, BSP will demonetize the coins as they have done with all past issues.
Unlike the United States, not every coin or currency note produced by the world mints and central banks are legal tender. However, it is a story that keeps occurring as the world mints use commemorative and bullion coins to boost sales.
Recently, there was an issue in Canada with the Royal Canadian Mint’s $20 for $20 program. Beginning in 2011, the Royal Canadian Mint began to sell silver coins with the face value of $20 for $20 tax-free. When the price of silver dropped not only did Canadians return the coins but they tried to spend them.
Aside from the falling revenues caused by the return of the coins, Canada does not require merchants to accept all legal tender coins. When some Canadians tried to spend the $20 coins, the Bank of Canada had to issue a statement to stop the practice and threaten to demonetize the coin. Demonetization would have hurt the secondary market on top of the falling price of silver.
Nearly every country in the world, except the United States, demonetizes previous issues of coins and currency. A recent example was this past year when the Bank of England demonetized the old “round pound” when the Royal Mint issued the new 12-sided pound coin.
The only United States coin to ever have its legal tender status revoked was the Trade Dollar. The Trade Dollar was minted to compete with other silver coins for trade with East Asia beginning in 1873. Although not intended for the United States trade market, it began to find use, especially in the west. To control its use, the Trade Dollar was demonetized in 1876. The coin regained its legal tender status as part of the Coinage Act of 1965, the law that introduced clad coinage and ushered in the “modern era” of United States coins.
Every coin produced by the U.S. Mint can be used as legal tender at their face value, although it would be foolish to spend an American Gold Eagle one-ounce coin for its $50 face value since its gold content would be worth more!
And now the news…
Calling all coin collectors — you could have a coin in your stash right now worth thousands of dollars and not even know it. Don't miss out on possible cash. There are three things to look for in your half dollars, quarters, and dimes. → Read more at abc13.com
(ANSAmed) – ROME, JULY 3 – An exceptional discovery was made at the Vulci archaeological site, where a treasure of coins from the 3rd century B.C. was found intact, according to a statement from the site's scientific department. → Read more at ansa.it
Commemorative coins issued by the Bangko Sentral ng Pilipinas (BSP) can be used purchase goods or services as these are deemed legal tender, the central bank said on Wednesday. “Together with BSP-issued banknotes and coins, commemorative coins … may be used … unless these coins have been demoneti → Read more at manilatimes.net
Iranian state TV says police have arrested a man who was hoarding two tonnes of gold coins in order to mani… → Read more at finance.nine.com.au
The new series of banknotes and R5 coin designed to celebrate milestones of former president Nelson Mandela’s life will go into circulation next week Friday. → Read more at timeslive.co.za
Police believe a rare 470-year-old coin may prove the key to the Sutton Coldfield murder → Read more at birminghammail.co.uk
Ancient remnants including stamps and currency offer a trip down history lane → Read more at thehindu.com