Recently, Bank Negara Malaysia has issued 3 types of legal tender commemorative coins in conjunction with the Installation of His Majesty Seri Paduka Baginda Yang di-Pertuan Agong Sultan Abdul Halim Mu'adzam Shah. What is legal tender coin? Can you use the recent agong xiv RM1 nordic, RM10 Silver or RM100 gold coins in your daily transaction? In Malaysia, only Bank Negara Malaysia (BNM) is allowed to issue "legal tender" currency (coins and banknotes) under Central Bank Of Malaysia Act 2009 (before this, Bank Negara Tanah Melayu Ordinance 1958).
What is Face Value
Before we talk about legal tender, you need to understand what is face value. I had seen many collector made a mistake about their coin face value. For example, they bought the RM1 nordic gold at RM10, the face value of the coin is RM1 not RM10. RM10 is the sale price by BNM. You can see the face value written on the coin itself.
What is legal tender coin?
Legal tender mean that currency allowed by law to be a medium of payment. In Malaysia case, the law is Central Bank Of Malaysia Act 2009.
It is stated in Section 63, Central Bank Of Malaysia Act 2009:
"Only currency notes and coins issued by the Bank shall be legal tender in Malaysia".*“Bank” means Bank Negara Malaysia or in English, the “Central Bank of Malaysia".
According to Wikipedia, the origin of the term "legal tender" is from Middle English tendren, French tendre (verb form), meaning to offer. The Latin root is tendere (to stretch out), and the sense of tender as an offer is related to the etymology of the English word extend (to hold outward).
Can I use legal tender commemorative coin for daily transaction?
Yes. Legal tender mean you can get face value of the coins if you want to use it as a medium of payment. If the face value is RM10, you can buy item at RM10 value. But that depend on the people who receive your coins, can they accept commemorative coins as a medium of payment? You cannot force people to accept your legal tender commemorative coins because it is not a legal circulation coin, it is a Non-circulating legal tender coins. Commercial Bank or any business can reject or accept it in their daily transaction.
But before you're thinking about using that silver coins in your daily transaction, make sure you ask your collector friends or coin dealer. Collector most of the time buy silver coins a bit higher then their Face Value because to use, the coins have numismatic value.
But before you're thinking about using that silver coins in your daily transaction, make sure you ask your collector friends or coin dealer. Collector most of the time buy silver coins a bit higher then their Face Value because to use, the coins have numismatic value.
Can I use Malaysia Commemorative coins in other country?
Malaysia currency only recognised by law to be medium of payment within Malaysia.
Withdrawal from circulation coin
Some coin like the 1 sen still legal tender but has been withdrawn from circulation. That mean BNM has been withdrawn that coin from circulation but you still can use it as a medium of payment.
Ceased to be legal tender
I think everyone of you already knew, RM1 coin has been cease to be legal tender since 7 December 2005. That mean your RM1 coin face value cannot be use as a medium of payment in this country anymore, the coin cannot be use in your daily transaction.
Some of you might be thinking, why someone in their right mind want to use a RM10 commemorative coin in their daily transaction? You buy that coin for RM150 at Bank Negara Malaysia. They're many reason for that. That person maybe need money fast, He maybe bought that coin at face value or he don't know the price of the commemorative coins. For your information, not everyone is a collector. If you're coin dealer, I do think many of you bought some coins at face value before, right?
If you have a chance to buy a commemorative coins at face value will you buy them?
Do you know that BNM long time ago sell their commemorative coins at face value?
