The currency of a nation is issued by a government of that nation either on the recommendation of the national bank or upon advises by the stock exchanges.
The currency to be issued and be circulated nationwide has to follow various government norms and a prior notice has to be given to the public by the government and sufficient opportunity of being heard must be given.
- The government has to follow procedures like making the money legal tender by the law prevailing in the finance Acts of such nation. No person can refuse to accept such money in the nation and doing so may land him in troubles.
- Further the currency has to be printed or minted in whatever form it may be like paper currency or coined currencies. Their circulation may increase or decrease but should not stop, except demonetized.
- The currency has to be backed by an asset having generally strong value and high liquidity in a fixed proportion at every time during the currency enjoys being under circulation.
Hence, there are various processes that are to be followed by the government for issuing currencies and making them a legal tender.
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