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Steve Horwitz

The US is Type 2 legal tender as well. As I understand legal tender laws, they only mean that you MUST accept the legal tender currency if offered, but CAN accept others. It is not a grant of monopoly. For example, along the US-Canadian border where I live, it's not unusual to find stores, esp. in Canada, who will accept either currency. Some US stores price discriminate by accepting Canadian currency at par.

aje

Thanks for that. I had overestimated how draconian legal tender laws are (or, at least, perhaps Hayek did). I've also just noticed in Menger's, 'Principles': "it [the state] is responsible for a significant improvement of its money-character" (p.262).

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