Question

Why is money regarded as a legal Tender Money?

Answer 1

Answer:

The currency issued by the monetary authority is known as legal tender money. It implies that the values of such currency notes and coins are backed by the monetary authority. Fiat money becomes the legal tender when it is backed by the monetary authority.

Answer 2

But 'Legal tender' is the money that is recognised by the law of the land, as valid for payment of debt. It must be accepted for discharge of debt. ... Currency notes are unlimited legal tender and can be offered as payment for dues of any size.