This is truly fascinating

The only currency we have in the UK is sterling. It is government created. No one else can make it. It is the only legal tender we have. It can only be put into circulation by the Royal Mint, which is government-owned, and the Bank of England, which is likewise government-owned. We literally only have government made money in this country. And we have to use it: nothing else is accepted for payment of taxes but g0vernment made money. That is why we use it for our everyday transactions.

And there was me thinking that the banking system made a lot of our money by issuing loans.

Or is that only on Mondays?

12 thoughts on “This is truly fascinating”

  1. The only currency we have in the US is the Dollar. And we use it because we have to – after all, it the only currency in which we can pay our taxes. Of course, this ignores the existence of the ability to pay in foreign currencies in some places, and other places that accept cryptocurrencies. Somehow these places are also able to pay their taxes in dollars.

    That’s also ignoring the efforts by the USG to actively suppress competing internal currencies – yes, people will create their own local money and trade in it and then the Treasury comes down and shoots them (or credibly threatens to until they back down).

    And then, of course, there’s the times when we simply barter in kind and directly trade for things and simply ignore the obligation to collect tax on that trade.

    Its almost like having to pay tax in dollars *doesn’t* mean that you will only deal in dollars.

  2. My Bullionvault account statement tells me that I have a few kilos of money that this genius is incapable of recognising.

  3. “nothing else is accepted for payment of taxes but g0vernment made money. That is why we use it for our everyday transactions.” There’s a mighty big leap there, the government could request payment in groats or lambs, doesn’t mean we’d instantly switch to them for everyday transactions.

    I’ve a feeling that the Royal Bank of Scotland, the Bank of Scotland and the Clydesdale Bank (and others in Jersey etc) may also point out that they have their own bank notes which can be used to pay for products in most shops (not even just in Scotland)

  4. The Zimbabwe government can insist on tax payment in Zim dollars.

    If (when) the Zim dollar is sufficiently mismanaged, Zimbabweans will still switch to using something else (e.g. US dollars, or cigarettes) for all other purposes.

  5. Bloke in North Dorset

    I thought it was possible to pay inheritance tax in stately homes and rare paintings?

    And as Cadet says, we only use it for convenience. As the Bank of England notes:

    “A shop owner can choose what payment they accept. If you want to pay for a pack of gum with a £50 note, it’s perfectly legal to turn you down. Likewise for all other banknotes, it’s a matter of discretion. If your local corner shop decided to only accept payments in Pokémon cards that would be within their right too”

  6. Has this man never worked in an office?

    In every office and every workplace I have worked, chocolate covered Hob Nobs have been the currency for payment of small favours.

  7. I was in Gibraltar some years ago. The currency freely circulating was all varieties of notes denominated in UK pounds. They would probably accept Euros (and dollars) as well at some usurious rate. I went into a shop to buy stuff and tendered an English £20 note. The shopkeeper apologised that she only had change in Gibraltarian & Scottish notes. I said Scottish was fine as it’s accepted all over the UK. I doubt Gibraltar notes are though, and I suspect shops in some parts of the UK would look askance at Northern Irish notes too.

  8. Absolutely true of course. Except for all those shops and banks and so on that accept other currencies. And all those financial instruments that allow us to trade in pretty much anything we like. And those places for swapping stuff and the grey market. And the black market. And all those cryptocurrencies, the primary point of which is to provide an alternative for those who don’t trust their central bank. Damn that reality.

  9. So Much For Subtlety

    Tractor Gent October 30, 2020 at 5:25 pm – “The shopkeeper apologised that she only had change in Gibraltarian & Scottish notes. I said Scottish was fine as it’s accepted all over the UK.”

    I went to the Auld Sod once. Came back with some Scottish fivers. A shop in the Midlands refused to take one. They did not recognise it but knew it was not proper English money.

  10. All sorts of places in Edinburgh and, when I was last there, London, will take payment in $ US and Canadian, € and ¥. As noted above, the exchange rate isn’t great. But you do get 1 for 1 if you try to use English money (until the great Nicola ascension, of course.)

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